Third of advisers struggle with admin burden

Third of advisers struggle with admin burden

The number of advisers spending 40 per cent of their time on administrative tasks has tripled in a year, according to data from Nucleus.

The platform surveyed 250 of its adviser clients and found that a third of users spent more than 40 per cent of their time on admin work, compared with 11 per cent of advisers last year.

Nucleus also found advisers were struggling to find enough time to service increasing client numbers, saying only one in seven advisers spent more than 40 per cent of their time with clients, down from one in five last year. 

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According to Nucleus, the average number of clients at adviser firms rose 9 per cent year on year to 163, with two thirds of advisers expecting client numbers to rise again this year.

But the provider stated of the 250 platform users surveyed between December and January 2019, almost a third turned away at least one in every five enquiries saying that they did not meet their firms' client criteria.

Time constraints could be a consequence of complying with new regulatory requirements, such as the Markets in Financial Instruments Directive (Mifid II) or General Data Protection Regulation (GDPR) both of which were introduced in 2018, which required advisers to spend more time on making sure these were implemented effectively.

Minesh Patel, an adviser at EA Solutions in London, has previously told FTAdviser he considered the current regulatory burden "onerous" and that it has caused him to stop taking on new clients with assets below £200,000. 

Barry Neilson, chief customer officer at Nucleus, said: "2018 was a challenging year for the financial advice market as a raft of new regulations including Mifid II, Prod and GDPR were introduced, increasing the burden of administration on firms. 

"This data allows us to see how these challenges are impacting our users, and how we can help them navigate these and free up more capacity to deliver quality financial advice."

According to the survey, the main source of new clients is through referrals or professional connections.

But advisers are failing to attract younger clients, with a third saying that this is an issue.

Nucleus stated this could be due to advisers dealing with wealthier clients, with 44 per cent dealing with assets that average £250,000. This level of money is something that younger people are unlikely to have.

There is also an issue with attracting younger advisers to firms, although this was found to be improving. According to Nucleus, three in five firms now employ between one and four individuals under the age of 30.

About 60 per cent of advisers spoken to had a turnover of more than £750,000. 

Mr Neilson said: "While capacity issues appear like they are going to persist, it is motivating to see advisers relish the opportunity, converting new business, understanding their clients more and looking to address any residual recruitment problems.

"They are rightly bullish on the outlook for their businesses and the market and we are keeping a close eye on how these numbers may change over the next 12 months."