Your IndustryAug 22 2016

IFAs feel pressure to offer more than financial advice

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IFAs feel pressure to offer more than financial advice

Over half of financial advisers are feeling the pressure to offer advice to clients on issues over and above their finances, with 27 per cent are reluctant to branch out due to time and personnel constraints.

People management software firm BrightHR surveyed 300 financial advisers in June, finding just over a quarter thought offering a more rounded service would strengthen client relationships.

Providing pension advice (29 per cent), property advice (26 per cent), employment law advice (25 per cent) and business software solutions (21 per cent) would benefit clients most, according to respondents.

A paper from the regulator in May suggested consumers should be given ‘holistic advice’ which considers other circumstances and goals, such as pensions, possible future care needs and inheritance.

But while some IFAs were already looking at extending their services (15 per cent) or would definitely look into doing so (53 per cent), a further 27 per cent wouldn’t look at that option or said it wouldn’t be beneficial to them.

Only 26 per cent of advisers surveyed described their overall relationship with clients as ‘strong’, while 41 per cent confessed it is ‘average’ and 3 per cent said it is ‘purely transactional’.

The biggest challenge advisers are facing in improving client relationships were the lack of time to meet clients face-to-face (53 per cent), too much administration to get through (26 per cent), understanding ever-changing technology (11 per cent) and poor communication skills (10 per cent).

In response to the findings, BrightHR worked with business consultant, author and academic David Fraser, to launch a new report on the importance of positive client relationships.

“It’s surprising to learn that such a large proportion of financial advisers are admitting their client relationships were not what they could be,” he stated.

“The survey clearly shows many businesses realise they need to prioritise time with clients and prospective clients but struggle to free up the capacity to do that.”

BrightHR also stated it offers a free partner programme to help advisory firms build better relationships with clients.

Paul Tooth, co-founder and chief executive of BrightHR, noted the advisers surveyed felt under pressure to offer more than financial advice, and despite the fact they thought it could potentially improve client relationships, one in five were unwilling to do so.

“For those that are interested and willing to offer additional services, our people management software could provide yet another solution. Through our partner programme, financial advisers can extend their service offering and position themselves as a more all-rounded adviser, while generating commission by recommending BrightHR.”

peter.walker@ft.com