Too few businesses appear to have planned how to transition client relationships as advisers retire, the president of the Personal Finance Society has warned.
Speaking to FTAdviser, Sarah Lord said many advisers had not planned in advance when it came to their own retirement.
She said: “We all know money is such a personal thing and often the client has spent many years working with an adviser, building complete and utter trust in that relationship.
“Changing this relationship to work with a new adviser can be a significant shift for clients as it takes time to build a rapport and trust. So, there should be a plan for transitioning the relationship over a couple of years but often that is not the case.”
Lord explained that while these existing relationships were important, it was equally important to focus on new generations of clients and build a clear understanding of what they want from the relationship they have with a financial planner.
“The intergenerational wealth transfer is upon us now, so we need to be on the front foot,” she said.
“We must ensure we are able to build appropriate client experiences for those new generations of clients so we sustain our client base as our existing clients, the traditional clients, pass the wealth on to the next generation.”
She added: “Only by securing our own financial futures through a clear focus on attracting fresh talent, building resilient business models and focussing on the client relationship, will the profession be well placed to help a growing number of individuals be empowered to manage their money and achieve their goals.”
Earlier in 2021, the Chartered Insurance Institute published its ‘Shaping the Future Together’ consultation to provide PFS members with the opportunity to have their say about the networking, skills and knowledge development they require from the body in the years to come.
However, the consultation was met with criticism by PFS members as the CII did not engage with the PFS board on the strategy prior to publication.
Lord said she was looking forward to reviewing the feedback received from members and using that to shape the support it offers in 2022.
She said: “In addition to considering how we best promote the value of financial advice to a changing demographic, there is also a need to explore and evolve training programmes, including those provided by the Chartered Insurance Institute.
“In the next 12 months, I look forward to reigniting conversations with our members on the vital role client relationship sustainability plays in securing the future of the financial planning profession.”
Reflections about 2021
Discussing the past year, she said 2021 would be remembered as a year when financial planners once again faced continued challenges and proved how resilient they are.
Lord explained the events of the past 12 months had shown how financial planners had ensured their business models were both resilient and flexible as many adapted to changing client needs.