Advisers and their clients need to make investments work harder for them due to the increasing trend of working for longer, according to research from HSBC Life.
Its nationwide study surveyed 200 advisers across the UK and found that on average they expect 43 per cent of their clients to work past standard retirement ages.
They predict just under a third (29 per cent) of their clients are to retire overseas.
HSBC said this underlines how advice and the use of investable capital must adapt to help support clients with achieving their plans.
Mark Lambert, head of onshore bond distribution at HSBC Life, said: “The idea of a standard retirement age linking in with state pension age still resonates.
“It is a reasonable point in time to be used in financial planning where an adviser’s client is not ready to confirm exactly when they wish to stop working, but clearly the landscape is changing and will continue to change as will views on retiring overseas.”
The adviser research was combined with a survey of clients for HSBC Life’s report, The Three I’s of Investable Capital, in association with consultancy Technical Connection.
It found the trend of retiring later and potentially retiring abroad is set to grow in prominence.
HSBC asked 1,000 clients with a minimum of £25,000 investable assets who currently have a financial adviser or saw one within the past three years.
Around 44 per cent of clients working with advisers expect to work and generate income beyond standard retirement ages rising to 64 per cent among those aged 35 to 45.
Around 24 per cent expect to or plan to retire abroad.
HSBC said research for the report underlines the pressing need for income from investments.
Advisers estimate that around 45 per cent of their clients have a current need to generate an income from their investments.
They estimate that around 42 per cent of them however are drawing on capital rather than on natural income.
Lambert said: “The growing shift in retirement attitudes is part of the evolving way that people plan for retirement and how they use investments vehicles other than pension products in that process.
“Being able to generate a tax-efficient income, for example, through tax effective wrappers like onshore bonds could well contribute to the answer.”
HSBC Life's report analyses the full range of investable capital assets including equities, collective investments such as unit trusts and OEICs as well as Isas, onshore and offshore bonds, defined contribution, and defined benefit pensions, VCTs, EIS, SEIS, structured investments, and crypto investments.
It highlighted how capital investments can be structured to achieve intergenerational and estate planning, as well as the role of initial and ongoing advice in ensuring an optimal outcome from the investment of capital and the potential future tax treatment of capital investments.
sonia.rach@ft.com
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