An exodus of financial advisers could be seen in the near future, with half (49%) planning to retire during the next five years.
The survey conducted on behalf of Investec Wealth & Investment gathered answers from 100 industry participants.
One in three financial advisers (35%) and planners said they intend to retire from the industry before they reach the age of 50.
Researchers also found 37% are considering retiring within the next four years and 22% plan to do so in the next three years. Only 6% said they plan to stay in the job until they are 60 or older before retiring.
In terms of the reasons for retiring relatively early, one in three advisers questioned pointed to the job becoming ‘too stressful’ as a reason to make an exit from the industry. Over a third (38%) cited ‘personal reasons’ and a third (37%) said the company they work for has been bought or merged, and they ‘do not like their new working conditions’.
Around a third (32%) said there is ‘too much regulation and red tape’, and 29% said health reasons factored into their planned exit.
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These figures raise the question of what will happen to the clients of the large numbers of advisers retiring in the next few years. The survey found 51% of advisers interviewed estimate their firm will only keep up to 50% of the clients’ assets they currently personally manage, and just under half (48%) said their firm will keep between 50% and 75%. Only around 1% said their firm will keep between 75% and 100% of the assets.
On average, the soon-to-be-retired advisers surveyed each help manage around £34m worth of assets, with more than one in 10 (12%) managing between £50m and £100m.
Simon Taylor, head of strategic partnerships at Investec Wealth & Investment (UK), said: “Our research points to a number of concerning trends, with half IFAs and financial planners interviewed planning on retiring in the next five years and their employers not retaining all of their clients’ assets.
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“As the sector is set to lose so many of its most experienced workforce, more must be done to make it an attractive career for new talent – both to the younger generation just starting out and those looking to switch from other professions.”
“We have been working with The Lang Cat on research which looks at the practicality of running models for advisers in the light of the current regulatory environment,” Taylor continued. “The ways in which adviser firms operate and the tools and services that are available to IFAs and financial planners have a huge impact on their day-to-day workload, but also on the quality, value and level of service they can offer their clients.”
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