Wealth tax changes are changing the way advisers need to approach cash management for their clients, according to research by Flagstone.
In a survey of 198 financial advisers in March, the firm found 86 per cent of financial advisers are offering as much, or more, advice on cash management now versus last Autumn.
Three in 10 (30 per cent) said client demand for cash management advice has grown.
Claire Jones, head of strategic partnerships at Flagstone, said: “Advisers are experiencing a gear-change in terms of their clients’ attitudes towards cash.
“Whether this is the result of a marketwide flight to safety amid uncertainty over tax changes and sustained geopolitical turmoil, or just a simple need for greater reassurance, more advisers are seeing more clients come to them to explore what cash holdings look like as part of a well-balanced investment portfolio.”
Meanwhile, a third (31 per cent) reported more clients are keen to keep money in cash than they were previously.
“For years, cash has often been overlooked in portfolio discussions,” Jones said.
“But now advisers want better tools to track it, report on it, and build it into long-term financial planning.
“They’re under pressure to show clients that every part of their portfolio, including cash, is working hard.”
Advisers were also asked about their expectations regarding the future of cash Isas and two-thirds (66 per cent) expect limits on cash Isas to come into effect by the end of the year.
Jones added: “To have abolished cash Isas in the Spring Statement which had been a widespread fear would have been irresponsible and unfair.
“Cash Isas are not, however, in the clear yet and the common expectation is that there will be limits applied to annual deposits within months.
“Front-footed advisers will take the opportunity now to familiarise themselves with the cash options beyond ISAs that best suit their clients.”
This data follows the recent announcement that Intelliflo partnered with Flagstone to make client reporting easier for advisers.
sonia.rach@ft.com
