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Warning sounded over new advisers struggling amid pandemic

Warning sounded over new advisers struggling amid pandemic

Warning bells have been sounded over newly qualified advisers struggling to secure clients amid the ongoing coronavirus pandemic. 

Newly published research by adviser review site VouchedFor has suggested the majority of advisers new to the industry are suffering to find business as client meetings are pushed online. 

When VouchedFor surveyed 30 advisers who achieved their CF30 qualification within the past two years, 23 advisers said the crisis had made it harder to build trust with prospective clients. 

It echos concerns raised earlier this year that the newest advisers in the industry would be hit hardest by the financial impact of the coronavirus crisis due to their reliance on new business. 

Jacob Wright, an adviser who started advising in January 2019, said it was a "tough time" to be a new adviser.

He said: "It was hard to win new clients before Covid-19. It’s harder now.

"Clients are understandably more cost sensitive and, while platforms like Zoom are great, they are not the same as sitting down with someone in person."

It comes as VouchedFor has launched a "kickstarter programme" aimed at helping new advisers build momentum on its website and which will include one-to-one coaching. 

Alex Whitson, managing director at VouchedFor, said it was "widely accepted" the advice profession needed new blood, but warned it could be hard for new advisers to win client confidence.

Mr Whitson said: "They don’t have a long track record to reference, or a large client book to generate referrals from.

"Covid-19 has intensified this challenge as building trust in person is largely off the table.

"We’ve made some changes to our platform that help new advisers, such as the ability to invite ‘first impression’ reviews from prospects, but it’s clear we need to do more.

"This is why we have launched the Kickstarter Programme."

In May advisers told FTAdviser businesses at an earlier stage of their lifespans were likely to rely more on initial revenue, which is set to be worst affected by the financial uncertainty caused by the crisis.

Where advisers may now be more concerned about the longevity of their businesses, and while established companies have been able to maintain their clients’ trust, concerns were raised young advisers without a track record will lack the financial resources to overcome any drop in revenue.

rachel.mortimer@ft.com

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