One factor which may have helped other professions such as the legal profession has been their ability to add new services. Many have prospered on rapid growth in claims and accident litigation handling. I know some have expanded into estate agency, and divorce work has been a major boost for many firms. They have also grasped the opportunity to advertise. If you pick up your local newspaper I doubt you will miss the advertisements for local legal firms. This was unknown 20 years ago.
Financial advisers, on the other hand, have gone backwards. Seen any adverts for financial advisers lately? I doubt it. I am old enough to remember the days of Camifa (the Campaign for Independent Financial Advice) advertising on TV back in the 1980s. It seems like a different world.
It is true that some advisory firms have begun to venture into new areas – for example, launching auto-enrolment pension services for businesses – and that is welcome. Technology could also be a boon to growth with robo-advice opportunities on the horizon.
It seems unlikely, though, that we will see a pick-up in adviser numbers until something significant happens, and that probably needs to be two-fold: an industry-wide campaign to expand the number of financial advisers and the investment of large institutions in financial advice firms because they see financial advice as a profitable area in which to invest, not a lame duck profession.
Financial advice also needs to break out of its cottage industry mentality and shout a bit if it is ever going to move forward. Many advisers offer a great service but too few consumers know about it.
Financial advice needs to beak out of its ‘cottage industry’ mentality and shout a bit if it is ever going to move forward
I have deliberately avoided, here, blaming over-regulation for holding back growth. Solicitors see strong regulation as a business benefit, not a handicap. It is too easy to blame excessive regulation for stunting growth and that is just not good enough.
Ultimately growth will be driven by consumer demand, and consumers must understand, want and need the benefits of financial advice. This means that financial advisers have to offer a service that people want to buy at the right price. Currently the impression I get from many advisers I talk to is that while their own clients cherish their services it is very much an exclusive club; a well-kept secret. That has to end.
The professional and trade bodies in this area also have to do more to unite to promote financial advice consistently and with some realistic targets for growth.
