Savings platform Flagstone says its adviser panel is reporting greater client demand for cash advice due to nervousness about the future of cash ISAs.
Flagstone regularly polls its panel of 200 financial advisers. In its latest survey, conducted in March, it found that wealth tax changes announced in the last few months are changing the way advisers need to approach cash management for their clients.
The majority of financial advisers (86%) said they are giving as much or more advice on cash management now versus last autumn. Three in 10 said client demand for cash management advice has become higher and the same proportion again said more clients are keen to keep their money in cash than they were previously.
See also: Flagstone warns against FCA pressuring people to ditch cash
Asked about their expectations regarding the future of cash ISAs, two thirds of financial advisers expect limits on cash ISAs to come into effect by the end of the year. Cash ISAs were not targeted in the Spring Statement, but may still see limits applied to deposits in the coming months. Advisers will be looking for alternatives options for cash holdings ahead of any changes.
See also: Cash ISAs booming with £4.2bn inflow as government weighs reform
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 market-wide flight to safety amidst 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.
“For years, cash has often been overlooked in portfolio discussions. 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.”
