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IFAs could buck the trend towards negative sentiment about business prospects that are dogging other service sector firms, it has been claimed. According to the latest Grant Thornton/Confederation of British Industry (CBI) report, levels of business volumes and values in the service sector “below normal,” sentiment has dropped sharply after what had been five quarters of steadily increasing confidence by this business community.

Chris Cummings, director general of the Association of Independent Financial Advisers (AIFA) said: “In times of unrest people need professional advice and there will always be potential in economic downturn. Turbulence causes uncertainty and business pressures, so IFAs need to stay close to their clients.”

Ian McCafferty, chief economic adviser to the CBI, said: “The services sector is beginning to feel the slowdown underway in other parts of the economy and firms are concerned about the outlook for their business over the coming year. This is focused mainly on the parts of the sector affected by tighter household purse strings, namely consumer services.”

He continued: “While demand has held up for most business services firms, some in management and legal services have been hit by slower mergers and acquisitions activity. Business services firms are doing what they can to insulate themselves from the slowdown, by focusing on increasing efficiency and seeking to reach new customers with new services.”

Alysoun Stewart, head of entrepreneurial advisory at Grant Thornton, agreed. She added: “The credit crunch is really starting to make its presence felt in the services sector, with both consumer and business services experiencing the steepest fall in optimism for more than six years. The business services sector as a whole will be battening down the hatches over the next three months.”