Larger client bases do not appear to be coming at the expense of morale: advisers are happy in their work, with a massive 87 per cent saying they would recommend their career path to others. As a result, the increase in clients served appears to be sustainable.
This is news that should be welcomed by the regulator, given the focus on closing the advice gap. The Financial Conduct Authority wants to see more people who can afford to do so investing their money in line with their risk appetite, focusing on the 4.2mn consumers with £10,000 or more in investable assets currently sitting in cash.
In its consultation on a new core investment advice regime, launched at the end of November, the FCA makes clear the centrality of financial advice to this goal. The regulator wants to make it easier for firms to provide advice that is proportionate to the needs of the consumer at a lower cost.
Also in November, The Investment and Saving Alliance backed a tabled amendment to the financial services and markets bill that would have paved the way for a formal regime of personalised guidance. While the amendment was not adopted, it is clear from the focus on this area that policy and regulation are likely to come.
Hybrid adoption is just the start. As tech advances continue to free up adviser time, firms will be able to think more creatively.
With so many seeing their cash holdings eroded by inflation, it makes sense for regulators to be concerned about the advice gap.
However, I have sometimes seen it suggested that it matters less to advice firms themselves. In a thriving industry, why would firms seek to provide advice to people with smaller pots, potentially on a one-off basis, for lower fees?
The flaw in this argument is that firms have their own advice gap to address: finding the next generation of clients.
In a consumer duty world, there will be increased focus on clients in decumulation and the balance between service, value and fees in a diminishing portfolio.
Many of the 4.2mn are the clients of the future – those who do not meet minimum investment thresholds yet but will do one day. Savvy firms are now getting to those clients early and starting to build relationships and brand recognition.
Hybrid adoption is just the start. As tech advances continue to free up adviser time and generate cost savings, firms will be able to look at other aspects of their working models and think more creatively about the clients they can afford to serve.
This should help more consumers find the financial advice they need, through the current uncertain times and beyond.
