Demand For Financial Advice Outstripping Supply
Need for financial advice remains strong but the number of advisers predicted to decline.
According to the latest research from Prudential, up to 5 potential clients are being turned down a month by a substantial 49% of financial advisers. 1 in 10 declined 6 or more and of the 206 advisers studied, 3 out of 5 have rejected the approach of at least 1 potential client in the last month.
Of 238 advisers surveyed by NMG Consulting for Apfa, 61% declined clients in the calendar year up to January 2014, up from 54% in 2013. 57% turned away a person seeking pension advice and 43% someone requesting ISA advice.
42% of firms established that a potential client’s circumstances meant that providing advice would not be financially viable for them, a rise from 37% the previous year. The Association of Professional Financial Advisers reported in March 2015 that the growing cost of regulation was impacting their calculations.
The NMG Consulting survey found that the industry sees itself shrinking with 51% of those questioned expecting the number of advisers operating in the U.K. to decline this year.
The news is not all bad for clients however as Prudential’s head of business consultancy for advisers, Paul Harrison states that “although demand for advice has exceeded supply, the advice community has reacted strongly to increase capacity by streamlining and improving their service proposition”. 78% of advisers now view their current clients as their greatest generator of business going forward.
With 40% of advisers expecting greater professional services referrals, there is little to indicate the industry will increase the services offered for others. The cost of advice could be set to rise in the near future, making now a good time to seek answers to financial issues whether personal or business related.
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