Getting to grips with regulation is at the top of advisers' minds heading into the new year but there has also been a decrease in the number of advisers taking on clients with less than £50,000.
The annual Schroders UK Financial Adviser Survey found almost half of advisers cited regulation as their main concern, up from a third in November.
Gillian Hepburn, commercial director at Benchmark, part of the Schroders group, said: “There's no real surprise here that at the top of their mind is regulation which was quoted by nearly half of advisers as the greatest concern relating to their business.
“Obviously you know, we've lived through the implementation of consumer duty this year and that is an ongoing piece of work for many advisers.”
Hepburn added that the FCA's sustainability regulations and advice guidance boundary proposals were also creating work for advisers.
The report, which surveyed 250 advisers between October and November, found the second highest concern for firms was finding new clients and servicing existing clients.
Overall, 15 per cent of respondents said they were “most concerned’ about finding new clients, while 12 per cent were most concerned about servicing existing clients.
Hepburn said this relates to wealth transfers, with 63 per cent of advisers concerned they could lose business as wealth moves between generations.
She said: “Advisers are really beginning to wake up to the concern that you could lose assets as wealth transfers across generations.
“For many advisers this is a retention play. Materially, as they start to think about exit strategies for their business and valuations, if clients are leaving the business, that can have a serious impact.”
The wealth transfer
Hepburn went on to say a reduction in the average age of clients was not being seen with the majority still over the age of 65.
She added there has been a “rapid reduction” in advisers willing to see clients with less than £50,000 to invest.
“In the context of wealth transfer, maybe particularly in terms of younger and less wealthier clients, the number of advisers prepared to advise clients with less than £50,000 to invest has dropped to an all time low of only 25 per cent.”
This is down from 52 per cent in 2019.
While around 20 per cent of advisers surveyed said they would not work with clients with less than £200,000.
Hepburn added: “Clearly [there are] some challenges here, but there is the regulation like the advice guidance boundaries and the advent of new technology.
“Will that help advisers to start to try and service some of these clients with less than £50,000 and at least get them into a pattern of advice?”
tara.o'connor@ft.com
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