More than half (55 per cent) of IFAs expect demand for financial advice to accelerate within the next five years, with many predicting a renewed focus on financial planning following the uncertainty resulting from Covid-19.
Research by Fidelity International’s adviser platform FundsNetwork showed more than two-thirds (68 per cent) of advisers anticipate a growing awareness of financial planning to drive this demand, with market uncertainty (58 per cent) and shifting personal circumstances (58 per cent) also playing a part.
The report, titled IFA DNA II, surveyed 200 advisers in February 2021 and was carried out by NextWealth.
Jackie Boylan, head of FundsNetwork at Fidelity International, said: “The events of the past 18-months will have led many people to reassess their financial priorities.
“While this may have led to more positive reflections for some - looking at how they can create opportunities for the future - others may be looking for greater security after such uncertainty. In either case this can present complex decisions which financial advice can help to navigate.”
The report also found that continued trends, including demographic shifts (33 per cent) and improvements in technology (16 per cent), were expected to contribute towards market growth in the near future.
Ricky Chan, chartered financial planner at IFS Wealth & Pensions, agreed with the findings in the report.
He said: “I think those that are in more fortunate financial positions are likely to review things like work-life balance, taking voluntary redundancies, changing jobs, retiring earlier and spending more time on things that they are more passionate about etc. which all require careful financial planning to ensure their longer term plans are still achievable – this means that well qualified and experienced financial planners and advisers are likely to be in high demand.
“Those that are in less fortunate financial positions, including those that have experienced being made furlough or redundant during the pandemic, may wish to rebuild the foundations of their financial plans to ensure that it is robust for any unforeseen challenges in future that may come their way.
“This would include putting together a sensible level of emergency fund, saving for the future and putting relevant protection policies in place.”
Concerned about clients
While advisers expected demand for advice to increase, the report also showed that many IFAs were concerned about the impact of the pandemic upon their clients’ financial wellbeing.
More than a third (35 per cent) of IFAs have seen an increase in the number of their clients experiencing money worries over the past year, with three-quarters (75 per cent) of these reporting a decline in their clients’ overall wellbeing and mental health as a direct result.
While most advisers (83 per cent) felt comfortable supporting clients with their financial wellbeing, 13 per cent said they would like more support in meeting their needs.
Rhiannon Vallis, wealth director at Unique Financial Planning, said: “The findings are in line with our own firm experience.
"Clearly, financial wellbeing is more than just investment and savings; it’s also linked to the security and peace of mind that proper protection delivers in an overall financial plan.