Your IndustryJul 12 2021

IFAs expect demand for advice to increase over next five years

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IFAs expect demand for advice to increase over next five years

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. 

“Adviser skills are unparalleled in this area and best-placed to ensure clients’ entire financial needs can be properly taken care of.”

Tim Morris, IFA at Russell & Co Financial Advisers, added: “For me, a key factor is the impact of the pandemic on people’s retirement plans.

"Those who have just retired and had made big plans eg. to spend much more time travelling have experienced massive disruption to their plans. They may not even be able to realise them at all.

“The elderly and young appear to have suffered the greatest impact to their wellbeing. The former generally find it more difficult to adapt and change their lifestyle.”

According to the report, technology (44 per cent) and training (29 per cent) are seen as key in helping to provide solutions.

Boylan added: “Financial wellbeing plays such an important part in determining how we feel about other areas of our lives, in both our sense of security as well as our ability to pursue life goals. 

“The financial challenges many households have faced during the past year will undoubtedly have added to the uncertainty resulting from the pandemic and placed further strain upon their overall wellbeing.

"Advisers can provide invaluable support as they look to overcome both short and longer-term concerns.”

Last week, research by Investment Trends, which surveyed 1,371 financial advisers in March 2021, showed three in ten financial advisers have seen profitability decline in the past year, a record since the study began in 2012.

sonia.rach@ft.com

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