# The changing face of financial advice 
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-20
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Why Combined Products Are Not the Solution for Retirement
Meta Description: Discover why combined financial products fall short in retirement planning, lacking transparency and failing to consider individual circumstances compared to
URL: https://financedigest.com/the-changing-face-of-financial-advicehtml

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_By_ **_Andrew Megson,_** _executive chairman, My Pension Expert_

In theory, product-based solutions are supposedly designed to make personal [financial planning more straightforward – particularly in retirement planning – which explains the recent suggestions of moving towards a combined product to replace financial advice](https://www.financedigest.com/financial-advice-for-starting-your-own-business.html "Financial advice for starting your own business"). However, this is unlikely to be the case in reality.

Indeed, the director of policy and advocacy at the Pension and Lifetime Savings Association, recently told the Work and Pensions Committee (WPC) that a combined product for anyone reaching retirement age could replace [needing to provide advice](https://www.financedigest.com/do-you-need-financial-guidance-or-financial-advice-or-possibly-both-find-out-here.html "Do You Need Financial Guidance Or Financial Advice – Or Possibly Both? Find Out Here"). The combined product would be a mixture of cash, investments, and guaranteed income capable of creating a retirement strategy, therefore foregoing the need to [seek advice](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") on how to approach one’s pension.

The financial [services](https://www.financedigest.com/4-ways-high-performance-analytics-powers-financial-services.html "4 ways high-performance analytics powers financial services") industry should always strive to make seeking financial advice easier and, therefore more accessible. Yet, combined products are full of flaws.

Firstly, a significant element of creating a solid long-term [retirement strategy](https://www.financedigest.com/investing-in-commodities-as-a-retirement-strategy.html "Investing In Commodities As A Retirement Strategy") is factoring in a client’s individual circumstances. A combined product fails to do this as it uses robo-advice, which, using minimal human intervention, devises a plan usually based on short-term goals. This is worrying, as [people need](https://www.financedigest.com/people-need-people-humanising-the-digital-banking-experience.html "People need People – Humanising the digital banking experience") to be equipped with long-term, not short-term strategies.

Not to mention, combined products do not offer adequate transparency. This can lead to a lack of [understanding amongst the public of what the product](https://www.financedigest.com/understanding-management-theories-and-maximising-productivity.html "Understanding management theories and maximising productivity") can achieve and the impacts of factors such as longevity being unknown to the majority of the population. Such confusion can cause the process to become more complicated than it already is.

While a combined product is not, and never will be, a [replacement](https://www.financedigest.com/ai-in-the-finance-department-augmenting-not-replacing.html "AI in the finance department: augmenting, not replacing") for independent financial advice, the industry mustn’t get complacent. The [pandemic forced](https://www.financedigest.com/g20-want-70-of-world-vaccinated-by-mid-2022-sets-up-task-force-for-pandemic-fight.html "G20 want 70% of world vaccinated by mid-2022, sets up task force for pandemic fight") advisers to adapt to new methods of advice, which has propelled accessibility and showed that advisers are willing to adapt to further progress.

**Virtual services** boosting accessibility

A necessary switch to virtual services in the face of lockdowns and social distancing restrictions beginning in 2020 has remained commonplace for independent [financial advisers](https://www.financedigest.com/top-north-east-financial-adviser-firm-talks-corporation-tax.html "Top North East financial adviser firm talks corporation tax"). Advisers would, for example, conduct client consultations over the phone or via a [virtual meeting](https://www.financedigest.com/meet-appyfair-the-long-awaited-french-leader-of-virtual-and-hybrid-events-is-now-available-worldwide.html "Meet AppyFair: the long-awaited French Leader of virtual and hybrid events is now available worldwide") instead of conducting them face-to-face.

And that switch to [digital is almost certainly here to stay](https://www.financedigest.com/digital-technology-and-startups-during-a-recession-how-to-stay-afloat.html "Digital Technology and Startups During a Recession — How to Stay Afloat"). Research from [VitalityInvest](https://adviser.vitality.co.uk/insights/technology-transforming-financial-planning-space/) suggests that the majority (74%) of advisers now expect virtual meetings to remain a part of their day-to-day operations.

Indeed, shifting towards virtual practices has been largely beneficial for both clients and advisers, with a modernised approach to advice allowing the whole [process to become more streamlined](https://www.financedigest.com/emvco-streamlines-approval-process-for-mobile-payment-devices.html "EMVCo Streamlines Approval Process for Mobile Payment Devices"). Clients are no longer required to consider the [time and effort required to travel to in-person meetings](https://www.financedigest.com/beijing-meets-state-air-quality-standards-for-first-time-in-2021.html "Beijing meets state air quality standards for first time in 2021"). And with meetings now more accessible and, in many cases, less formal, those deterred by complicated and lengthy financial advisory procedures may be more inclined to [seek advice](https://www.financedigest.com/some-credit-suisse-at1-bondholders-seek-legal-advice-law-firms.html "Some Credit Suisse AT1 bondholders seek legal advice -law firms").

**Boosting engagement**

As mentioned above, independent financial advice is better at equipping a person with a retirement strategy because it factors in their individual circumstances, however, to [keep clients on track](https://www.financedigest.com/will-mays-new-minister-percy-keep-the-northern-powerhouse-on-track-post-brexit.html "WILL MAY’S NEW MINISTER PERCY KEEP THE NORTHERN POWERHOUSE ON TRACK POST BREXIT?"), they need to be engaged in their strategy.

In a study into the state of pensions, [Capita](https://www.capita.com/our-work/engaging-people-their-pensions-through-power-personalised-communication) found that 61% of the 2,017 employees who took part were confused by pensions, and 72% weren’t engaged with their company pension. Such figures highlight the [problem advisers face](https://www.financedigest.com/disconnected-customers-are-one-of-the-biggest-problems-facing-financial-companies.html "Disconnected customers are one of the biggest problems facing financial companies") when getting people to attend regular reviews to discuss retirement plans. Certainly, for savers that are [years away](https://www.financedigest.com/heathrow-airport-says-return-to-pre-pandemic-demand-years-away.html "Heathrow Airport says return to pre-pandemic demand years away") from retirement and feel advisory meetings are unnecessary, a simpler tech-based approach through online apps, booking systems, and instant chat services could be the answer.

Indeed, [advancements in tech and the development of such platforms will be important in boosting engagement](https://www.financedigest.com/redpalm-enhances-client-engagement-with-vias-advanced-call-routing-solution.html "REDPALM ENHANCES CLIENT ENGAGEMENT WITH VIA’S ADVANCED CALL ROUTING SOLUTION "). Their ease of [accessibility is a huge advantage and allows advisers to communicate with clients through simplified](https://www.financedigest.com/alloy-partners-with-fiat-republic-to-democratize-fraud-free-crypto-trading-and-simplify-fiat-access.html "Alloy Partners with Fiat Republic to Democratize Fraud-Free Crypto Trading and Simplify Fiat Access") means such as over email. Here they can update clients on if they are on track to meet their retirement goals or share relevant information, including potential [investment opportunities](https://www.financedigest.com/unlocking-fresh-business-investment-opportunities-beyond-covid.html "Unlocking fresh business investment opportunities beyond COVID").

Meanwhile, as this hybrid of tech-based solutions and independent [financial advice progresses and becomes more commonplace in the industry](https://www.financedigest.com/matching-digital-adoption-with-cybersecurity-in-the-financial-services-industry.html "Matching digital adoption with cybersecurity in the financial services industry"), it will lower the cost of advice, making it more accessible to the masses.

Combined [products are not a substitute for independent financial advice due](https://www.financedigest.com/kids-oral-care-products-market-sale-is-anticipated-to-boost-with-tremendous-growth-by-2030-due-to-health-awareness-of-kids.html "Kids Oral Care Products Market Sale Is Anticipated To Boost With Tremendous Growth By 2030 Due To Health Awareness Of Kids") to their impersonal and short-term outcomes. That said, the [industry must](https://www.financedigest.com/why-the-industry-must-simplify-cybersecurity.html "WHY THE INDUSTRY MUST SIMPLIFY CYBERSECURITY") stay on track with its development of tech-based solutions to further facilitate accessibility of advice and engagement in retirement strategies. Strengthening this model will make sure the [financial services industry is one that fosters accessibility and affordability](https://www.financedigest.com/as-hackers-declare-cyberwarfare-financial-services-cannot-afford-to-be-complacent.html "As hackers declare cyberwarfare, financial services cannot afford to be complacent") while helping people achieve the retirement outcomes they deserve.

**_About Author_** _:_

_Andrew Megson is the Executive Chairman of_ [_My Pension Expert_](https://mypensionexpert.com/) _, the UK’s number one Advised Retirement Income Specialist. Founded in 2010, My [Pension Expert specialises in providing independent advice to UK consumers about their pension plans](https://www.financedigest.com/are-the-over-55s-accessing-their-pensions-early-failing-to-plan-for-later-life.html "Are the over-55s accessing their pensions early failing to plan for later life?") – it arranges millions of pounds worth of retirement income options each week._


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