While holding large sums of money in cash, which is prey to the vagaries of inflation, Mr Connell believes clients would be well advised to "retain some savings in cash, which is capable of being used as an 'emergency' source of income".
He adds: "Also, help clients be aware of scams, and to steer clear of them.
"Fraudsters are becoming ever-more sophisticated, and adviser expertise can ensure someone's lifetime savings do not disappear."
Talk about tax
Too often people focus on the contributions or the investment performance, but the importance of the tax boost given to pensions while accumulating is not often discussed.
Mr Adams states: "Advising on the benefits of funding a pension, such as the tax breaks, is another crucial issue to take into account."
According to calculations from Aegon, for example, the 2018 automatic enrolment contribution hike, together with the tax relief, will make a significant difference to someone's retirement savings.
Example:
- Assuming average earnings of £28,600 (according to Office for National Statistics).
- Salary offset of £5,867 (for 2017 to 2018 tax year) and £6,032 (2018 to 2019 tax year).
- Employee annual contribution: - £22,568 x 2.4% = £541.63 a year (£45.14 a month; £10.42 per week).
- Tax relief - 0.6% x £22,568 = £135.41 a year (£11.28 a month).
- Employer annual contribution - £22,568 x 2% = £451.36 a year (£37.61 a month).
Peter Glancy, head of policy development for Scottish Widows, agrees tax is a vital point of discussion. "Advisers can create significant value for pension savers throughout their pensions journey - both through accumulation and after retirement.
"This might include helping their clients make the most of tax incentives and, importantly, helping them form holistic financial plans, where pensions might be complemented with the use of Isas, cash savings, equity in residential property and so forth."
Contribute more than the maximum
As covered in previous articles in this guide, giving people some form of statistical evidence will help advisers back up the argument that paying more in early enough will help provide a better outcome in retirement.
Mr Adams comments: "We'd always advise contributing more than the minimum [as the minimum] is not likely to be sufficient to retire comfortably."
It is also advisable to help clients "make adjustments when their plans change from time to time", says Mr Glancy - meaning regular reviews might be in order both pre- and post-retirement to ensure the investments and the pension plan remains suitable to the individual's needs.
"Clearly", Tom Selby, senior pensions analyst for AJ Bell comments, "everything depends on the individual needs and aspirations of different clients.
"The main drivers of good retirement options, however, remain painfully simple: save as much as you can, as early as you can; make the most of the free money on offer - namely tax relief and matched employer contributions; and take advantage of long-term stockmarket growth, subject to your appetite for risk."
simoney.kyriakou@ft.com
