Almost half of advisers (49 per cent) turned away up to five potential customers in a month, with one in 10 having to reject six or more people, according to research by Prudential.
A study among 206 advisers across the UK showed three in five advisers have for various reasons turned away a potential client in the last month.
Yet despite advisers having to reject clients, 51 per cent of those polled expected the number of advisers operating in the UK to shrink this year.
The research also revealed a growing number of clients now come from the professional services sector, including accountants and solicitors.
A total of 11 per cent said referrals from the professional services sector is the biggest contributor to their new business pipeline.
Additionally, 40 per cent of all advisers expect to see referrals increase from professional services over the next 12 months.
The biggest driver of business for advisers is the quality of their service proposition, as 78 per cent of advisers say current clients act as their most important source of business.
Additional factors advisers say were the biggest source of new business were being on approved supplier lists at 7 per cent, having an online presence at 7 per cent and direct marketing activity at 4 per cent.
Paul Harrison, head of Prudential’s business consultancy for advisers, said: “Analysis of advisers’ new business pipeline over the next 12 months reveals some interesting trends.
“What stands out is that the quality of the service and value added by advisers is increasingly a new business referral tool in itself.
“Although demand for advice has exceeded supply, the advice community has reacted strongly to increase capacity by streamlining and improving their service proposition.
“The past few years have been a period of sustained change for advisers so it is worth remembering and restating the real value of what advisers do for their customers.”
In March 2015 the Association of Professional Financial Advisers reported a growing number of advisers were turning clients away because it would be uneconomical to service them as the weight of regulation continued to push advisers’ costs up.
A survey, conducted by NMG Consulting for Apfa among 238 advisers, found 61 per cent of advisers have turned clients away during the 12 months to January, up from 54 per cent in 2013.
Of this figure, 57 per cent had turned away potential clients seeking pension advice and 43 per cent had turned away clients seeking Isa advice.
Affordability of advice was identified as the primary reason behind turning potential clients away, with 42 per cent doing so because it would not economical to service them based on their client’s circumstances. This was up from the previous year’s 37 per cent.
ruth.gillbe@ft.com
