Key findings from the Schroders Adviser Pulse Survey 2025
The UK financial advice sector is undergoing significant transformation. Insights from our latest Adviser Pulse Survey, conducted in May to June with over 270 advisers, reveal how firms are addressing these challenges and opportunities.
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A shift in client priorities
Our latest Schroders Adviser Pulse Survey highlighted a marked change in mood. Last November, only one in ten clients felt pessimistic about markets; at the time of the survey, over four in ten shared that view. Concerns over capital loss were also at their highest level since we began tracking these trends, with 81% of clients saying their main worry is protecting their capital. This represents a notable shift in adviser-client conversations.
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Figure 1: How would you describe the sentiment among most of your clients?
It's important to highlight that the survey was conducted during a period of heightened market volatility following President Trump’s tariff announcements on ‘Liberation Day’, which prompted a sharp market sell-off. Since the survey closed, markets have rebounded, demonstrating how quickly sentiment and conditions can shift. Our analysis shows that 10% market drawdowns are commonplace, and 20% declines occur approximately every four years. These recurring bouts of volatility, while often unsettling, reinforce the need to focus on the long term and avoid overreacting to short-term market movements.
The introduction of broad tariffs, and the market movements that followed - especially post ‘Liberation Day’ - have prompted many clients to reconsider their financial strategies. Indeed, 39% of advisers report that clients have already made changes in response to recent events.
More than ever, financial advisers play a crucial role in helping clients navigate such periods, reinforcing the importance of a robust financial plan and the discipline to stay invested, despite short-term uncertainty. Volatility can be uncomfortable, but it can also create opportunity - particularly for active managers able to identify value amidst market dislocation.
Estate planning changes
Looking ahead to 2027, both advisers and clients will face one of the most significant estate planning shifts in decades, as unused defined contribution pension pots become subject to Inheritance Tax (IHT) calculations. Almost all advisers are now reviewing client circumstances and wealth transfer plans, with about half expecting that more than half of their clients will need to update their plans.
This change erodes a key advantage of holding pension savings later in life - the opportunity to pass them on free of IHT. For many, this will require a fundamental rethink of drawdown strategies and wealth transfer options.
Estate planning is a complex process and early action will be essential. The timeline is tight: final legislation is expected at the end of 2025, a transition period starts in April 2026, and the full change comes in by April 2027.
Advisers are working with clients on a range of approaches, such as:
- Increasing withdrawals and gifting out of normal expenditure: Helping reduce the size of the pension pot subject to IHT, provided gifts meet HMRC’s “normal expenditure” criteria.
Rethinking drawdown order: Considering drawing from pension pots earlier, and preserving tax-free assets like ISAs for later.
Speeding up gifting: With pensions losing their IHT edge, the seven-year rule for gifts is more relevant - but must be balanced with clients’ income needs and possible care requirements in later life.
Figure 2: Which of the following strategies have you discussed with clients in response to the proposals to include unused pensions in Inheritance Tax from 2027?
This is clearly a pivotal moment for the profession. Taking early action and helping clients put strategies in place to make the most of their pension wealth will only strengthen trusted relationships.
Regulatory pressure points
Evolving regulation is prompting advisory businesses to adapt at multiple levels. Consumer Duty remains a key driver, with 62% of advisers believing that the ‘fair value’ outcome will put pressure on ongoing charging models. At the same time, managing vulnerable clients is taking on greater significance as both regulatory expectations and client needs evolve. Currently, 68% of advisers categorise less than 10% of clients as vulnerable, but this may underestimate the true figure, given the FCA’s broad definition which includes factors such as health, resilience, major life events and financial stress.
The FCA’s proposals for targeted support in pensions, set out in the Advice Guidance Boundary Review (AGBR), represents further regulatory development. These aim to close the gap between generic guidance and full financial advice, allowing consumers to receive tailored suggestions based on limited information about their pension decisions.
Against this backdrop, advisers are rethinking their propositions. Forty-six percent are considering new offerings for specific client segments, while over half say their main strategy for clients who are no longer economic to serve is to develop lower-cost, lighter-touch services - ensuring ongoing support and meeting regulatory expectations for accessibility and fair value.
AI as an enabler, not a threat
Advances in AI are providing advice firms with new tools to meet these challenges. The survey shows 37% of advisers have implemented some form of AI technology - up from 21% in November 2024 - and only 7% expect to never use it. Most advisers see the main benefit of AI as improving business efficiency: automating paperwork, analysis, and regular client communications.
Summary
The Schroders Adviser Pulse Survey reveals a sector navigating complex change. Advisers are responding thoughtfully to a rapidly evolving environment, with clients increasingly focused on capital protection and stability in uncertain times. At the same time, major changes to pension inheritance tax are prompting early action as clients - and their advisers - reassess estate planning strategies.
In this new landscape, success will depend on clear communication, careful planning, and a willingness to adapt. Advisers who combine technical knowledge with empathy and flexibility will be best placed to help clients manage uncertainty and support their financial futures, reinforcing trust and value at every stage.
Click here to download the full results and adviser survey report.
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