Fears of a new-client drought look set to continue plaguing advisers this year amid ongoing uncertainty surrounding the coronavirus restrictions.
According to a recent survey among Personal Finance Society members, almost half said their greatest operational concern for 2021 was the prospect of fewer new clients.
The threat looks set to follow advisers into the new year, with research from the Lang Cat published in November warning hundreds of advisers had found acquiring new clients "significantly harder" during the first waves of the pandemic in 2020.
The PFS survey, which collated data from 70 of the professional body's members, also flagged adapting to more remote working as the second biggest challenge advisers expected to face in 2021.
Keith Richards, chief executive of the PFS, said advisers adapted at "lightening speed" to the new normal created in the wake of the pandemic last year.
He added: "The pace of change shows no sign of slowing down in 2021 and will bring new business risks, but also many opportunities to continue to rethink old ways of working, drive greater efficiencies and develop new methods of engaging with clients."
An ongoing challenge
Heather Hopkins, managing director of NextWealth, said the prospect of dwindling new business was a challenge felt "more by some financial advice firms than others".
Ms Hopkins said: "Our analysis suggests younger financial advice businesses have been hit hardest.
"Mature firms tend to rely less on new clients for revenue and they also have a larger bank of clients who feed them referrals and have more established relationships with professional referrers, such as accountancy or law firms.
"Younger businesses that rely more on new business for revenue are more vulnerable to a short term slow down."
But existing client referrals might not be enough to buoy advisers this year amid recent warnings advisers could be missing "critical referrals" as the majority of people would not follow recommendations from advised family members.
A survey of more than 1,500 adults in the UK, commissioned by advice giant Quilter last summer, found only 18 per cent of respondents who had never received financial advice would consider using an adviser recommended by a relative.
Ms Hopkins also said she had heard anecdotally from financial advisers that it was taking longer for clients to make a decision regarding advice.
She said: "We hear that the clients tend to take longer from the initial meeting to agreeing to implement the plan.
"The positive is these younger financial advice businesses are thinking creatively about their propositions and client acquisition strategies.
"We hear about firms offering online seminars for financial wellbeing and financial MOTs, implementing strategies to build referrals from existing clients and building lower cost online only propositions for certain segments of clients."
Ms Hopkins said she was confident the long-term outlook for financial advice was "positive" and businesses had shown themselves to be resilient to "all sorts of changes".