Pension consolidation business has rocketed since A-Day according to advisers with 73 per cent saying this type of business has increased since April 6 2006.
Research by Skandia found that only 1 per cent of advisers said pension consolidation business had decreased since A-day while 85 per cent of advisers said that the main benefit of A-Day for their clients is that it gives them greater control over their investment strategy.
Access to more flexible investment options with the rise of wrap platforms is also an important benefit of pension consolidation according to 61 per cent of advisers.
Forty-six per cent said single valuation statements were a key benefit, and 40 per cent said access to flexible at retirement options were an important consideration.
Pension consolidation is not just for very wealth clients according to advisers, with 43 per cent saying they would consider pension consolidation for clients with pension savings of any value.
The majority of advisers (61 per cent) say that on average their pension consolidation clients have three separate pension plans that need combining into a single scheme. While 25 per cent say the average is four schemes and 9 per cent say it is two. Six per cent of advisers said on average it is five schemes or more.
Skandia head of pensions marketing Nick Bladen says: “Many people seeing a financial adviser for the first time will have no idea how and where their pension fund is invested. But you cannot manage money efficiently and effectively if you don’t know where it is invested. This creates a huge opportunity for financial advisers which many seem to have been embracing since A-day.
“Advisers are using pension consolidation to give their clients control over their investment strategy and access to more flexible investment options. Much of this business will be reviewing and considering moving clients away from out dated with-profits and in-house managed funds.
“Advisers can then use external fund links to build tailor-made investment portfolios that match their clients’ individual needs and expectations, both at outset and on an ongoing basis. By embracing today’s technology, there is a real opportunity to improve efficiency in portfolio construction, management and review, thereby adding further substantive value for clients.”