Six in ten (60%) of financial advisers surveyed said they intended to retire by 2030, highlighting the need to attract more people into the industry, according to the report from Octopus Investments.
Advisers were also asked whether they are serving more clients compared to 5 years ago. Almost half (48%) said they were serving more, but a quarter (25%) still said they were serving fewer. When asked why, the most common reason was the administrative burden (48%), followed by a focus on serving higher value clients (38%) and the time taken up by review meetings (32%).
Attracting talent was considered an important issue for 67% of adviser respondents. The most common problem faced by firms trying to recruit fresh talent was a difficulty finding quality candidates, with over two thirds (67%) of adviser citing this as an issue, up from 46% last year, followed by associated costs of recruitment (33%) and a lack of structured pathways (33%).
The report highlighted the lack of awareness of financial advice as an attractive career path. Almost two thirds of financial advisers (64%) said financial education would help, while a similar number (62%) said more awareness generally was needed.
Jackie Lockie, head of financial planning at the Chartered Institute for Securities & Investment, said: “The profession itself should be reflective of the society that it serves. We’ve got this advice gap already, if we don’t have a diverse population of advisers and paraplanners to serve the public, then the advice gap is only going to get bigger rather than smaller.”
When asked about their future plans, 29% of advisers surveyed said they intended to retire by 2025, rising to 62% by 2030, equivalent to approximately 15,000 advisers leaving the profession. This is slightly up on last year, when the figure stood at 58%.
Octopus Investments said that the report also highlighted the need to work with the regulator to enable a more flexible approach to providing advice and guidance with the development of “light touch and guidance services”. It said that a reappraisal of where the line is drawn between what is and is not regulated advice could free up advisers to provide lower cost services of genuine benefit to less wealthy clients whose financial needs are relatively straightforward.
The report said it should be possible for advisers to provide such services without fearing that they will fall foul of the regulatory regime.
Rohan Sivajoti, co-founder of NextGen Planners, said: “We should remember that not everyone needs ‘full fat’ financial planning. Sometimes people just need an arm around the shoulder, telling them that they are doing the right thing. That’s where the development of light touch and guidance services could help an awful lot too. In partnership with the regulator, we need to find new ways of working that enables more people to get the guidance they need, which ultimately helps them to make the most of their money and live the life they want.”
For the report 225 UK advisers were polled by Opinium as well as the views and opinions of industry figures from organisations including NextGen Planners, CISI, Openwork and Quilter.