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HNWs to boost advice demand

Advisers will benefit from an increased demand for financial advice from high-net-worth individuals after Chancellor Alistair Darling hiked the higher rate of income tax to 50 per cent.

Darling said that people earning over £150,000 will be sub- ject to a 50 per cent tax rate from 2010/11. In the pre-Budget report in November, Darling announced that he would be raising the higher rate of income tax to 45 per cent.

Skandia head of tax and financial planning Colin Jelley says this will increase the need for financial advice.

He says: “With a return to tax rates last seen in the 1970s and with this Government adding layer upon layer of complexity to the tax system, it will drive the need for financial advice.”

Anand Associates managing director Bhupinder Anand says: “I think it is fantastic news for advisers who have the experience and already operate in the sophisticated tax planning end of the market and have an existing relationship with clients at that level. It is a superb opportunity, especially in the current marketplace which is tough.”

Syndaxi Financial Planning managing director Robert Reid says: “Anybody finding themselves in the higher-rate band is going to have to seek professional advice. A lot of those people might not have had advisers before. This gives a big opportunity for well organised firms to take on new clients who are more than likely to be receptive to paying a fee for this service.”

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