Advice firms in 'good shape' despite client drought threat

Advice firms in 'good shape' despite client drought threat
 Mark Polson, principal at the Lang Cat

More than half of advisers have faced the risk of a new-client drought throughout the coronavirus crisis, the latest research from the Lang Cat has found. 

According to a survey of 565 people working in the advice sector last month, 58 per cent reported acquiring new clients had been "significantly harder" during the pandemic. 

The data is in tune with warning bells sounded last week over newly qualified advisers struggling to secure business as client meetings were pushed online. 

Concerns were raised early on in the crisis over the link between the industry's newest advisers and their reliance on new business, and the Lang Cat's research suggests the challenge is being faced by hundreds of other advisers. 

Not all doom and gloom 

Despite difficulties in securing new clients the majority of respondents, 59 per cent, said their advice businesses were in good shape with a positive outlook on the future. 

Meanwhile 89 per cent of respondents said their experiences of serving existing clients and conducting reviews remotely had been "largely positive" and had shaped their future client work. 

Mark Polson, principal at the Lang Cat, said the retail advice sector had proven to be "incredibly resilient" over the past year.

Mr Polson said: "While this doesn’t surprise us in the slightest, the fact that advice firms predict their turnover will be static or better, is a remarkable state of affairs considering how other sectors have fared through the pandemic.

"Their ability to quickly change processes in-flight and just get on with things for the benefit of their clients should be applauded.

"If you were an investor and looking for a sector that would stand firm in the face of relentless challenge, then advice is where you’d be looking."

At the beginning of November FTAdviser reported advisers felt resilient in the face of the then-looming second lockdown, with clients and staff having adapted to working within restrictions and remotely.

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