Business Support  

How to reach unadvised clients

  • Identify the different client groups
  • Explain how advisers can appeal to future clients
  • Explain the impact of technology
CPD
Approx.30min
How to reach unadvised clients
 Credit: Helena Lopes/Pexels

Depending on what research you read there are different statistics as to what the level of the unadvised market is, and to be honest we will probably never truly know. 

However, what we do know is there is a significant percentage of our society that do not currently engage with a financial adviser. 

Data from the FCA FAMR Survey in 2018 found that 1 in 10 UK adults took advice on investments, and there is potentially up to 18.2 million people that have £10,000 or more in savings who might need advice but have not taken it - which equates to approximately 36 per cent of the UK population. 

The unadvised market is broadly made up of two groups of clients: Clients of today, essentially the baby boomer generation, who over the last 10 -20 years have accumulated some form of wealth be that in savings and investments or in their pension assets, and are approaching retirement or are retired and would benefit from receiving advice. 

Then there are the clients of the future: Millennials and Gen Z who are starting out on their financial planning for the future, are trying to save and invest to meet their longer-term goals and aspirations.

It is this second group that make up a significant proportion of the unadvised market and where there is real opportunity for individuals and businesses that focus on providing a service that meets their needs. 

Clients of the future 

Many may wish to challenge the view that this is a key market to focus on due to the perception that it is harder to deliver value for money to these individuals when compared to the clients of today. 

However, we need to remember; 20 to 30 years ago the baby boomer generation were the clients of the future.

In the last decade in particular we have matured into a profession that delivers professional financial planning services for a fee and are therefore operating in an environment where it is essential that we demonstrate how we deliver value for money for the fees that we charge. 

Various research suggests that within the next five years, millennials and gen Z will comprise 75 per cent of the workforce.

Furthermore, research from Kings Court Trust in 2017 estimated that £5.5tn will transfer from the baby boomers to millennials and Gen Z, yet research undertaken by Octopus in 2019 for their Great Wealth Transfer project found that the majority (86 per cent) of those set to inherit do not have an adviser. 

But like generations that have gone before them, the millennials and gen Z’ers have a different set of needs and expectations:

  • Many of them work in the “gig economy” so their earnings fluctuate, probably more now than ever due to the impact of the Covid-19 pandemic
  • They are tech savvy because they have grown up with technology and so that is their preferred medium of communication 
  • They typically, but not always, have a greater focus on environment and sustainability issues than those before them.
  • For those that have been to University in recent years, the impact of tuition fees and student debt can be a burden when trying to plan financially for the future. 

So, when considering tapping into this large potential market it is important to consider that the business model applied needs to be flexible and the approach needs to be technology driven and human enabled.