‘The fee should never be an issue with clients’

Tim Morris, IFA at Russell & Co Financial Advisers, said: “In terms of fee pressures, these aren’t new. And I don’t believe we are competing against self-service platforms. These have been popular for well over a decade. 

“The key is always value for money. If people believe they are getting value for money, the fee should never be an issue.”

His comment came as the Embark Investor confidence barometer revealed that only 61 per cent of advisers surveyed agreed they were confident in their ability to charge enough, compared with 80 per cent last year. 

The confidence barometer, which is a twice yearly survey which asked 251 financial advisers, found that confidence in the future of the advice market fell from 81 per cent to 69 per cent this year.

Advisers need to look at the clients they love to work with.Justin King

Jamie Drewett, group head of distribution at Embark, said:  “Our results suggest some advisers may be going through a turbulent – even a confusing – time. If clients are highly satisfied with their adviser, and if the last couple of years has even helped to boost appreciation of the value of advice, why aren’t they feeling more optimistic?

“Anecdotally, advisers are telling us that price pressure from the self-serve market, rising professional indemnity and FCA costs, and even the weight of Mifid compliance, are affecting confidence.”

The survey also found that male advisers in particular were less optimistic than their female counterparts. 

Confidence among men in their ability to continue to charge enough was 53 per cent with 31 per cent neutral, whilst among female advisers confidence was 75 per cent with 11 per cent neutral.

Morris added: “Interesting that female advisers are more optimistic. This could reflect the conversations they have with clients. Not wanting to generalise, yet I do think us males are generally more product and investment driven. 

“Working alongside female advisers helped me develop my soft skills.”

Advised investors' satisfaction up 

Embark’s research revealed that record numbers of investors are satisfied with their financial advisers, despite adviser confidence falling over fears about the future of the market and their ability to remain profitable.

The research asked 250 advised consumers between 35 and 70 with a minimum of £100k investible assets and 503 non-advised consumers in the same range. 

It found more than three quarters (85 per cent) of advised investors surveyed were satisfied with their financial adviser, while only 4 per cent described themselves as dissatisfied. 

This marked a significant increase from the previous barometer, in which 68 per cent reported satisfaction, and 8 per cent  said that they were dissatisfied.

Justin King, chartered financial planner at MFP Wealth Management, said: “Great news that customers are happy. Regarding the “advisers are worried about the future”, advisers need to look at the clients they love to work with and deeply understand the significant value that they bring to those clients. 

“They then can focus their marketing around that type of client and challenges that they face.”

Meanwhile, around 86 per cent of those surveyed cited their adviser’s ability to understand their needs as the area they were most satisfied with, while 84 per cent said it was overall communication. 

Some 81 per cent of advised consumers said they were satisfied with the investment recommendations offered by their advisers. 

Embark said the results also suggested this surging satisfaction could generate new business, with the majority (83 per cent) saying they would be comfortable recommending their adviser to friends and family, with only 5 per cent uncomfortable doing so.

Morris commented: “It’s good to see that client satisfaction levels in advisers are so high. Although not surprising.”

The survey asked advised investors about the positive outcomes of the pandemic and almost half (42 per cent) said that they had developed a better appreciation of financial planning due to the disruption of the past two years.

Drewett added: “Advisers will always have one strong reason to believe in the health of the market – the value of advice. Advisers we have spoken to have been clear that, while there will always be a conversation to be had on costs, it does not need to be a differentiator.”

sonia.rach@ft.com

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