The latest figures on personal pensions from HMRC show a slump from 950,000 self-employed paying in 2006/07 to a mere 350,000 in 2015/16.
The silver lining is that the amount being invested has at least increased from £3,230 in 2006 to £5,310.
Jon Greer, head of retirement policy at Old Mutual Wealth says: “This data from HMRC may suggest that instead of paying into their pension little and often, the self-employed only pay into a pension when they are confident in their disposable income.”
While no one would suggest that portfolio advisers would ever be the sole channel for reaching this market, it does beg the question of whether they are underserving the self-employed in terms of pensions and other investments.
This is especially stark given research that suggests the self-employed have comparable overall wealth to their employed peers.
"Those that want to build financial advisory businesses for the next 15-20 years should be looking at this area."
The Pensions Policy Institute has just published a report ‘Policies for increasing long term saving of the self-employed’, sponsored by OMW and released at the Conservative Party conference in Manchester.
Underserving the self-employed
It notes that while the self-employed have similar overall total wealth, the sources of this wealth differ.
They are less reliant on pensions and indeed are much more pension-sceptic with just 28% who believe pensions are the safest way to save compared with 52% of employees.
The PMI also notes that 7% of the self-employed believe the largest part of their retirement income will come from their business, a figure that will make many advisers wince at the concentration of risk involved.
Among the policy approaches suggested by OMW include using the annual tax-return to nudge a self-employed person to nominate a pension arrangement to receive a pension contribution.
It also suggests a ‘sidecar’ model for self-employed pensions aimed at addressing the issue of managing cash flow.
It suggests a ‘sidecar’ approach involving creating an optimal level of liquid savings - around one-sixth of annual income - using a dual liquid account with easy access and pension account.
Once funds reach a certain level in the liquid account, then all contributions would be paid into the pension account.
But as policy makers grapple with tax and regulatory solutions, are advisers missing out on an important market especially those among the self-employed who may be directors of significant businesses a few years hence?
Gap in the advice market
Adam Carolan, chartered financial planner with Xentum, says many advisers remain focused on the opportunities arising from the pension freedoms and may not need to service any new markets.
But there are opportunities for advisers alive to the changing shape of employment.
He says: “For those that are looking longer term, the opportunity is absolutely there as we live in an entrepreneurial world now. It has never been easier to start a business and make money given the digital age.
"This is starting to show with an ever-increasing number of younger successful entrepreneurs. Because of my age and the way I work - on fixed fees - I have had a fairly easy and profitable time working in this area of the market for a few years now.
"I am starting to see more of my peers enter the market for the better. The upside in this area of the market is huge for those looking to build for the long term.”