Inertia could cost investors their retirement income, yet five million of us abdicate responsibility for asset allocation of our pension fund to our employers.
A survey by Barings Asset Management revealed that 5.2 million people cited their employer – rather than themselves – as the responsible party when it came to understanding asset allocation. But many workplace pension schemes operate under a series of assumptions that may not be suitable for all scheme members – and smaller companies in particular simply do not have the resources to educate their employees about pension planning.
Employers were not the only go-to for those planning their pension savings however, as financial advisers were favoured by 7.9 million people – a cheering figure considering the initial backlash against advisers following the Retail Distribution Review earlier this year. RDR came into force at the beginning of this year and dictates that advisers now have to charge clients upfront fees for their services instead of being paid commission by the providers of the products they recommended.
Marino Valensise, chief investment officer at Barings, said it was encouraging that financial advisers remain the most popular source of financial planning advice for consumers.
“The importance of a financial adviser’s expert knowledge cannot be underplayed when it comes to effective, long-term financial planning,” he said. “It is interesting to note, however, the significant and complementary role that employers and advisers are set to have in helping people plan for their retirement."
Valensise stressed that while it was the employees' responsibility to seek independent third party advice at the point of being auto-enrolled into a work place pension, the remit of employer responsibility is growing in the consumer’s eyes.
"Whether engaged by the employer on behalf of their employees or by the consumer direct, the role of advisers can only grow," he added.
