Research into the impact on retirees of the Pension Freedoms has found that over half (54%) of advised retirees now rank flexibility as a key priority.

In addition, 33% of retiree investors said reducing risk was their main priority.

Both factors are driving the demand for financial advice, says Aegon which carried out the research.

Research by the company among 252 UK IFAs also highlighted the changing investment preferences of those in retirement, said the company.

Aegon believes this change in emphasis towards more flexibility is a direct consequence of Pension Freedoms and also is connected to demographic and social change.

Faced with improving health and increased financial challenges, many investors are choosing to retire gradually over time rather than suddenly. The Pension Freedoms appear to be making phased retirement more of a possibility.

Aegon said: “As retirement is increasingly a process rather than a fixed event, investors naturally require flexibility in their pension planning.

“The trade off – perhaps even conflict – between flexibility and risk reduction is not easily understood by investors and highlights the need for advice to help navigate through individual investors’ competing requirements.”

Retirees are embracing the Pension Freedoms and have materially shifted away from annuities, says Aegon.

The rise in income drawdown is accompanied by growing interest in diversified strategies, according to the firm.

Research shows that on average, over two-thirds (67.6%) of assets for retiring clients are being allocated to multi-asset and diversified equity strategies.  By contrast, ‘traditional’ retirement instruments such as fixed income, annuities and guarantees account for only 22% of a typical retiring clients’ portfolio.

Nick Dixon, investment director at Aegon, said: “Pension Freedoms have paved the way for retirees to adopt a new attitude and approach to how they manage income in retirement.

“Our research shows that flexibility is the watchword for retiring clients, in how they access their money, their level of income, and the investment strategy they adopt. Demand for advice is rising, driven both by the structural shift away from annuities and by the competing needs of investors who require expert advice to help manage complex trade offs.”

Research for the Aegon Adviser Attitudes Report 2018 was conducted by Opinium among 252 UK IFAs.