When there is volatility in the markets and the economic outlook is uncertain – as has been the case for much of 2020 – people naturally seek financial advice.
However, Sarah Waring, client and proposition director of Quilter’s national advice business, warns the industry faces a recruitment crisis, with the number of advisers leaving the industry far outpacing the number of advisers who are entering it. She adds that, over the short term the need and demand for advice is likely to keep rising.
Ms Waring says: “Some of the scarier predictions state that 10 per cent of the current crop of advisers could be leaving the profession each year over the next three to four years, amounting to a loss of over 7,000 advisers.”
As a result, she says the financial advice community needs to think carefully about ways it can attract more talent into the industry to help plug the hole.
And this is at a time when, like many other companies, Quilter Financial Planning – which came top in FTAdviser’s Top 100 Financial Advisers last year – will be assessing its response to the Covid-19 crisis.
While recruiting more people into the industry is going to be the best solution to increasing adviser numbers, Ms Waring says she strongly believes the industry must also look to technology to help those advisers still in the industry cope with the increase in demand.
She adds: “Technology will therefore need to help improve advisers’ efficiency. Some obvious areas where technology could help is to do with the delivery of ongoing service requirements and the implementation of advice recommendations.
“Ultimately, we may get to a point where the tech is sophisticated enough to do an initial fact-find and produce a first recommendation, which in turn gives advisers more time to focus on life coaching and the aspects of financial advice, which will never be able to be replicated by a machine.”
Saying that, she adds that improvements in tech will place additional pressure on advisers to exhibit the personal value that they bring to each client.
Clients will come to expect more personalisation, as they may feel that generic algorithms may satiate their needs, unless the bespoke service from an adviser truly gives them that personal service they are after. This will put an additional spotlight on the value of advice and, in turn, the fees charged.
Ms Waring says: “The financial advice profession will adapt to any changes as it has shown it can do time and time again. However, it is likely that it will be more focused on the planning aspect as this will be where advisers can fully showcase their value.”
The coronavirus crisis has not only affected the markets and consumer confidence, but it has also impacted the way people work.