Providers are already seeking to make tasks such as forecasting cashflow and constructing portfolios more joined up, helping to establish this desired consistency. Another important development that will be felt in the years ahead is the advent of artificial intelligence (AI). Given AI’s ability to work through vast amounts of data at speed, spotting patterns as it goes, this should enable the rapid creation of tailored advice.
The combination of cost pressures, a smaller average pension pot, and increased regulation is also likely to drive greater specialisation within advisory firms. “I think we're going to see more individual IFAs and small groups not doing their own portfolio construction or investment management,” says Douglas Kearney, investment and finance director at Intelligent Pensions. “Much more of that will be subcontracted out to discretionary fund managers and IFAs will concentrate purely on advice.”
The end result of these trends will be a leaner, more tech-oriented industry, but also one that should be better able to deliver high-quality, tailored retirement advice to a client base increasingly in need of it.
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