54% of advisers have ‘increasingly positive’ business outlook

More than 54% of surveyed financial advisers are “increasingly positive” regarding their business outlook compared to a year ago, while 79% reported an increase in new client numbers in 2019, new research has revealed.

The survey, which also found that only 1.4% of advisers had reported a reduction in new client numbers, suggested that advisers across the UK had seen their turnover grow in 2019, despite rising costs and widening regulation.

The 2020 Financial Adviser survey, the fifth to be carried out by global fund data provider FE fundinfo, suggested that the demand for financial advice has been driven by more complex financial needs, low growth in DIY investing, and a lack of alternatives to spending time with a professional adviser.
 
The new report also revealed that nearly 52% of advisers reported increased turnover of at least 5% – with almost 30% reporting turnover increasing by over 10% – and 57% of those surveyed revealed they were now using third party model and managed portfolios in some capacity, which was up from 50% last year.

The FE fundinfo survey consisted of 46 questions completed by 271 financial advisers throughout November and December 2019.

FE Investments head, Rob Gleeson, commented: “It’s not surprising that IFAs are turning to third party providers. Most IFAs are not investment professionals, but rather lifetime financial planners. Many recognise that they are not experts in fund selection, so prefer to concentrate their time on providing due diligence around those that are.

“We are fortunate at FE Investments that we do not come from a traditional investment background but are problem-solvers instead. We recognise the position that many IFAs have found themselves in and have developed an investment proposition accordingly.”
 
FE fundinfo also highlighted the FCA’s intentions to see retirement pathways adopted over the course of 2020 for non-advised clients, and described retirement planning as another “potential growth area” identified in the research.

The survey revealed that nearly half (48%) of advisers now have a dedicated retirement proposition, as opposed to 34% last year.
 
Gleeson added: “Prior to the introduction of pensions freedoms, planning for retirement was fairly simple. Investors would invest to accumulate and then pay into an annuity.

“But now, even for those investing in vehicles like Self-invested Pension Plans (SIPPs), there is no guarantee of long-term income. We need to reframe attitudes to risk in retirement in order to provide a long-term sustainability of income.”

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