The retail financial trade press is full of stories from financial advisers about losing funds under advice/management as clients raid their SIPPs to avoid the threat of a reduced tax-free cash entitlement after the October budget. If I had an adviser, I’d have pissed her or him off by being an insistent customer and demanding I had my money in my account by October 30th. That’s a quarter of my “pension wealth” now sitting with HSBC whose mortgage to me is no more. L&G are no longer taking fees on a quarter of my big pot.

I would have taken more but getting my tax-free cash out of Nest is such a hassle I have given up.

If nothing happens to tax-free cash on October 30th, I will rue my behaviour and no doubt wise after the event advisers who have urged clients to stay put will be breathing a sigh of relief.

If tax free cash is further restricted then many clients will be irate if they were advised not to listen to the likes of Henry Tapper.

For the sake of my reputation, I am not advising people to take their tax-free cash if they don’t have it lined up to pay down debt or buy a Lamborghini (other makes are available- tra la lah).

Between a rock and a hard place.

Most financial advisers do not charge flat fees or hourly rates, they take their money from a charge on funds under advice and this is sensible, it gets them out of charging VAT and it gives the client a means of paying bills out of tax-advantaged savings (an additional tax-free drawdown),

Losing up to a quarter of a client’s source of revenue is tough on the financial adviser but what’s even tougher is the consequential loss to the value of your business. Advisory businesses are value on a multiple of funds under advice/management. Money out the door reduces the retirement nest egg for the adviser.

The conflicts of interest are obvious and it’s not for nothing that the FCA has recently launched an inquiry into the private equity market’s hunger for financial advisory businesses. The threat to wealth from losing up to a quarter of pension money is made worse by the prospect that money held in pension wrappers is exempt from inheritance taxes (at least to the 75th birthday).

Redeploying pension wealth into pensions may become more than an option, it may become best advice under the consumer duty. Attempts so far to count pension or annuity income as assets under advice have not yet taken off. The rock and the hard place are Hobson’s choices.

As if this were not enough, the Chancellor is waving her stick at Capital Gains Tax rules which could mean that the reliefs enjoyable by those selling businesses , are reduced or eliminated. The demographic of advisory business owners is almost entirely over 55. Succession so far has been a human resource issue , but increasingly it may become a fiscal one.

Best left unsaid

Most of these matter are left unsaid in the financial press. They are however the conversations that are happening in the member lounges of our nations golf clubs as financial advisers brace themselves for what could be a peculiarly unpleasant budget,

At best, the budget is likely to bring change (not a popular topic for successful businesses). At worst the budget could seriously damage both the revenues and capital values of advisory businesses.

Most of these businesses are small and privately owned, increasingly these businesses are small and owned by private equity and there are a few of the owners of these businesses which are large and publicly quoted. It doesn’t make much difference what your link in the ownership chain, the impact of tax changes in the budget is not a prospect viewed with any relish by the financial advisory community