Financial Planners are predicting a shake-up of the advice industry even though they expect a rise in demand for financial advice with the impact of the Coronavirus pandemic a major driver for clients to seek support, according to new research from analysts AKG for its new Future of Advice paper.
According to the research, 45% of those surveyed expect more advisers to retire and a third (34%) expected to see a rise in the sale of advice businesses.
AKG also carried out consumer research which showed nearly one in five adults (17%) said they specifically need advice to address financial issues caused by Covid-19. More than two out of five (44%) were concerned about the financial risks from major shocks such as pandemics.
Customers questioned for the study were more than twice as likely to prefer face to face advice. Over half (55%) said they preferred seeing a person in comparison to 22% who would prefer to rely on technology.
AKG’s study found the biggest barrier to consulting an adviser was that many consumers do not think they need them. Almost half (43%) of those who had not seen an adviser in the past five years believed they had enough knowledge to decide for themselves.
AKG said that the pandemic was accelerating changes that were already underway as demonstrated by the rise in M&A activity across the sector and the age profile of advisers.
Other issues highlighted by Financial Planners questioned for the paper included concerns around the rising cost of professional indemnity insurance (71%) and risk/compliance (51%).
Matt Ward, communications director at AKG, said: “Intermediary distribution is the lifeblood of the financial services companies assessed by AKG and so a key part of our work in assessing the operational strength and sustainability of these companies involves close monitoring of the likely future shape of the advice market.”