The media furore surrounding the changes has already had a discernible effect on public consciousness, with financial companies reporting a 214% rise in calls regarding saving options in the four days following 7 April.
Stanfield, chief executive at the Federation of European Independent Financial Advisers, believes that in order to benefit from the potential pool of fresh capital, managers may have to amend their services to accommodate lower net-worth individuals.
“Wealth managers may have to look a slimmed-down service to bring in some of that new client base,” he said.
“A lot of IFAs have a £50,000 to £70,000 minimum [client assets threshold] and will have to amend their framework to capture a greater share of the market given the volume that will result from the new pension freedoms.”
However, the issue may not just apply to those targeting the lower end of the pension pot spectrum, as Darius McDermott, managing director at Chelsea Financial Services, explained.
He said: “If a wealth manager’s cut-off point is £250,000 but a client comes to them with £150,000, it is below the threshold but the industry should still be aspiring to get that money in order to grow. It may well be that they have to offer a cheaper and slightly lower-grade service.”
Stanfield said that in order to meet regulatory standards it is a question of advisers maintaining viability, and believes that a less-focused service should not equate to a lower quality one.
“Lower net-worth individuals may not get the same range of advice [as higher net-worths] but the quality would still be the same,” he expanded. “It is more of an issue around the type and level of advice provided that is key to industry.”
“The pension freedoms may drive some advisers [at larger firms] to perhaps look at joining smaller companies that are more flexible and prepared to look at lower net-worth individuals.”
But McDermott questioned whether stripped-down offerings could exacerbate the issues posed by financial illiteracy.
“The level of financial illiteracy out there is staggering,” he said. “There are going to be a lot of people out there who will need more than the government is going to provide in the way of guidance.”
“The issue is whether lower-cost offerings can still give a good service – can wealth managers run a lower-cost offering and still give the advice that is clearly needed?”
On the other side of the table, Stanfield contended that the relevant information is available and the onus should now be on the public to take responsibility for their futures.
“There is a lot of discussion around how much financial education should be provided to people, both as an industry and a society,” he argued. “But ultimately it is down to them – there is plenty of information available regarding saving options and capital return expectations. People should take more responsibility.”
