Financial advisers ‘riding wave of opportunity’

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Financial advisers are riding a wave of opportunity in 2017, according to a new ‘Adviser Attitudes Report’ from Aegon, assessing the health of the UK advice market.

One in five expects growth to be ‘significant’ as they capitalise on emerging advice opportunities such as Defined Benefit (DB) to Defined Contribution (DC) transfers.

The report – which tracks the behaviour, attitudes and concerns of the UK financial adviser market – found the sector to be in rude health, despite a slight fall in the total number of financial advice firms since 20151.

As the pension freedoms take root, and savers have to take on more personal responsibility for securing their own financial wellbeing, advisers are reporting a growing customer base.

Three quarters 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.

Such is the anticipated scale of demand that more than a quarter of advisers expect to grow their team in the next 12 months to meet it.

When considering the biggest opportunities for the advice market over the next two years, DB to DC transfers emerge on top, with more than half of advisers identifying it as a key area for growth.

The promise of pensions dashboards featured prominently for a quarter of advisers as improved access to information about historic savings plans may prompt the demand for broader pension planning and advice.

Social care funding was also marked out as a key opportunity for growth by one in five advisers.

Although they have done little to dampen business optimism, a number of threats are showing up on advisers’ radars as they look ahead to the next two years.

Two in five advisers are concerned that Brexit could hurt their business, although one in five see it as an opportunity, showing how uncertain a post Brexit world looks.

But the combination of broader political volatility and Brexit is seen as a key threat by 70% of the adviser market.

Regulatory change is also a worry for many, with Mifid II (23%) being called out as introducing further uncertainty to the path ahead.

The advent of robo-advice is also a topic that divides advisers, with 31% expecting to see 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 as bullish about profits and turnover, with three quarters reporting a profits increase over the past year and similar numbers expecting to see profits grow in the next 12 months.

Four in five firms have seen turnover grow over the past 12 months, and the same number expect this growth to continue over the coming year.