A fifth more IFAs are feeling confident now than at the start of the pandemic last year, as many have recovered from the shock brought on by Covid-19.
According to a survey by Opinium, 72 per cent of IFAs rated their business as good in April 2021, compared with 52 per cent of IFAs in April 2020.
This confidence is mirrored by investors, with 64 per cent saying investments were in a good state, up from 41 per cent in April 2020.
The research carried out was across 1,000 UK investors with significant investable assets between May 21 and May 25, and 208 IFAs between April 29 and May 6.
It found there had also been an uptick in the number of new investors entering the market.
Of those IFAs who said they’d seen an increase in advice in the last 12 months (48 per cent), two thirds (65 per cent) said this included new investors, compared with 12 per cent in April 2020.
Alexa Nightingale, research director at Opinium, said: “Given the unrelenting uncertainty of the past year it is encouraging to see confidence among investors and IFAs on the up again.
"The entrance of new investors into the market and the increase in demand for advice mirror this feeling of positivity."
Felix Milton, chartered financial planner at Philip J Milton and Company, said: “We can certainly echo the increase in new client enquiries, with a steady uptake over the past few months.
“Of course, the start of the pandemic was not pleasant for anyone, but we’re pleased to see that the investment gains made since the initial March falls have been positive, and of course, this will encourage new individuals to invest.”
He added: “Advisers and clients need to be cautiously optimistic though, as if inflation does slowly creep into the economy, interest rate rises to soften this could lead to some market volatility which could be a worry for new investors.”
But Darren Cooke, chartered financial planner at Red Circle Financial Planning, said: “Actually I think it is remarkable that even in April last year 41 per cent of investors still thought their investments were in good shape while it is similarly worrying that it is only 64 per cent now.
“So currently a third of investors don't think their investments are in good shape when, in general, investments are at roughly the highest valuation they have ever been."
Meanwhile, the survey showed that over two in five (45 per cent) IFAs said they started using or increased ESG investing in April 2021, compared with a third (33 per cent) who said the same in April 2020.
When looking at investors, in April 2020 one in five (20 per cent) said they would start or increase their ESG investing – an intention that has been stuck to, with 19 per cent of investors saying they have done this in April 2021.
Cooke said: “Personally I have seen a rise in new ESG investors but when that was almost nil before it is coming from a very low base and is frankly still an insignificant number of my total clients.”
Opinium’s research found that investors were moving away from non-advised investment management to a mixture of advised (25 per cent) and non-advised (31 per cent).
When looking for advice from places aside from advisors, investors’ alternative sources are investment platforms (31 per cent), friends and family (27 per cent), traditional media (26 per cent), online forums such as reddit (19 per cent), social media (14 per cent) and robo advisers (11 per cent).
sonia.rach@ft.com
What do you think about the issues raised by this story? Email us on FTAletters@ft.com to let us know
