The insurer said its research had found that 27% of advisers were working longer hours compared to a year ago with 4% of these working more than 70 hours a week. However, at the other end of the spectrum, 19% of advisers were working fewer hours than a year ago.
“Financial advisers are working harder than ever before, highlighting the ongoing demand for specialised financial advice,” said Vince Smith-Hughes, director of specialist business support at Prudential.
“We are closely reaching the point where demand will exceed supply,” he said.
Charging structure
In terms of average adviser remuneration in the increasingly fee-based world of UK financial planning, tax advisers charged the most at £167 an hour compared with mortgage advice which stood at around £143 an hour with the average rate running at £157.
Investment advice was being billed at around £158, pensions work at £159, and debt management at £160 an hour.
“When it comes to calculating this hourly rate, the majority of advisers (60%) said it was based on a calculation of their time plus a fair profit margin,” the insurer said.
“A further 15% compare themselves against their peers and charged what was perceived to a fair market rate,” it said.
Prudential arrived at its figures after conducting two sets of surveys. The first was carried out in March 2016 with got responses from 206 financial advisers nationwide. A second survey was done from 29 June to 7 July 2016 and saw responses from 104 financial advisers.
The insurer said it undertook the survey as 75% of its product sales are now made through advisers.
Debt work
Interestingly, when Prudential broke down the hours worked by the advisers by the areas of specialisation, those doing tax planning, pensions and investment advice were more likely to be working between 30 and 50 hours a week, while those specialising on debt management were typically working longer.
Around 7% of those working debt management worked over 70 hours a week compared with 4% of those working on tax, pensions and investments.
In terms of the outlook for the industry, Prudential’s survey found that 51% of advisers operating in the UK expect the numbers of advisers to shrink this year compared to only 11% who expected the number to rise.
Future advice
The research found the main growth of new business for advisers was likely to come from professional service referrals, including accountants and solicitors. While the quality of the advisers’ service proposition is the biggest driver of business for advisers.
Smith-Hughes said the best advice for advisers to grow their business was to stay abreast of tax and regulation changes and to continually upgrade and test their in-house due diligence process.
He warned of a so called “status quo bias”.
“If you have a system of checking the suitability of what you are recommending, don’t assume it’s going to be OK going forward,” he said.
