The financial advice market is currently facing a period of high growth and expansion, according to research from Dynamic Planner.
The firm’s annual spotlight report found 57% of advisers expect their businesses to continue to grow, with three quarters (75%) servicing more clients than three years ago,
Just 4% said they have seen their client bases reduce and some 65% of firms have seen new client enquiries grow.
Technology is viewed as a near-universal positive, with 88% in agreement that it is improving their ability to serve clients.
Just 23% of firms have returned to a majority face-to-face model. More than three-quarters are delivering most of their advice through hybrid or fully online models.
Headaches
Advisers do face several common challenges.
With the Consumer Duty implementation on the horizon, regulation is the number one headache, particularly for sole traders and small firms, where the time and cost burden weighs heaviest.
They also feel they are spending more time on compliance and administration, and marrying up multiple legacy systems and integration of technology can be a challenge.
But this is not impacting advisers’ views of the industry.
Advisers are happy in their careers and 87% would recommend their paths to others. Women are particularly likely to recommend careers in the advice industry.
Some 94% of over-65s would recommend financial advice as a career.
ESG
Advisers feel positive about the future of ESG in the industry, as 73% expect all funds to have some degree of ESG integration within five years.
The majority see sustainability as an opportunity for client engagement, with more clients now asking about ESG without being prompted.
Almost two-thirds of respondents feel confident that they have the tools and materials they need to make informed choices about sustainability for their clients.
Yasmina Siadatan, sales and marketing director at Dynamic Planner, said: “This year’s Spotlight Report, based on research drawn from one of the largest advice communities in the UK, paints a picture of a flexible industry that has weathered considerable challenges and emerged stronger.
“It comes at a turbulent time for advisers and their clients: war in Ukraine, an energy crisis, and central banks battling to control the highest inflation in a generation. Meanwhile, advice firms are reckoning with the biggest regulatory overhaul since the Retail Distribution Review.
“And yet the survey finds a buoyant industry facing the future with confidence. The productivity dividend that came from the pandemic looks to be here to stay. Hybrid working models remain in place and, as a result, advisers are looking after increasing numbers of clients. What was gained from this once-in-a-generation technological advance cannot be underestimated, it is enabling financial planning to be accessed by more people than ever.”
