According to the ‘Adviser Attitudes Report’ from Aegon, one in five (17%) expect growth to be “significant” as they capitalise on emerging advice opportunities such as Defined Benefit to Defined Contribution transfers.
The report, which tracks the behaviour, attitudes and concerns of financial advisers, found the sector to be in “rude health”, thanks to pension freedom business. This comes despite a fall in the total number of financial advice firms from 14,491 in December 2015 to 14,054 in December 2016 (Apfa figures).
Three quarters of advisers (76%) expect the number of clients that their firm services to increase over the next 12 months, while just 5% predict that customer numbers will fall. More than a quarter (28%) of advisers expect to recruit more staff in the next 12 months to meet demand.
DB to DC transfers emerge as the biggest opportunity with more than half (53%) of advisers identifying it as a key area for growth. The promise of pensions dashboards featured prominently for a quarter (26%) and social care funding was also marked out as a key opportunity by one in five (21%) advisers.
Threats on the horizon include Brexit, political volatility, regulatory change and Mifid II. Robo-advice is a topic that divides advisers, with 31% expecting to see it fuel more demand, while the same number of advisers (31%) see it as a threat. For advisers with average client assets in excess of £200,000, any concern is much less evident with only 10% seeing it as a threat.
Advisers are bullish about profits and turnover, with three quarters (75%) reporting a profits increase over the past year and similar numbers (77%) expecting to see profits grow in the next 12 months. Four in five (81%) firms have seen turnover grow over the past 12 months, and the same number (81%) expect this growth to continue over the coming year.
Steven Cameron, pensions director at Aegon UK said: “From RDR to advising on the pension freedoms, the UK’s financial advice market has been buffeted by its fair share of regulatory headwinds in the past decade, but has emerged stronger and more sustainable; as too have the firms that have proven they can adapt to meet the opportunities change brings.”
Keith Richards, CEO of the Personal Finance Society, said: “Advisers have good reason to feel positive about the future. Not only is consumer demand for their services continuing to increase, more and more people are recognising the value they bring and even the UK government has mandated regulated advice within their own pension legislation for safeguarded benefits over £30,000.”
Research for the survey was conducted by Opinium among 252 UK IFAs in June 2017.
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