The Financial Planning industry must do more to attract younger talent, according to a new report from wealth manager St James’s Place (SJP).
The industry needs to attract more advisers if it is to adequately serve the future client base, according to SJP’s The Future of Financial Planning report.
Within 10 to 20 years most current Financial Planners expect to have left the industry. Three in five (60%) of advisers told SJP they do not expect to be actively advising clients in 20 years’ time, whilst 35% did not envisage being in the industry for the next decade.
The majority (87%) of the 200 financial advisers surveyed said they do not have any formal plan in place to exit the sector.
The report also highlighted that advisers are ‘not sufficiently broadening their service’ to younger clients, with just 20% of average adviser clients aged under 45.
Most advice clients were aged 46 to 60 (44%), with a third over the age of 60.
Close to two-thirds (63%) of advisers were targeting their prospecting for new clients at those aged between 51 and 65, with over half (56%) looking at 66 to 75 year old’s.
Only a quarter of advisers said they were prospecting under 35s.
SJP also surveyed 1,000 clients of financial advisers for the report.
The client survey highlighted that clients felt they need to be more listened to by their Financial Planners.
Three in five of the clients surveyed said they would like to see changes to the service they receive from their adviser. This figure rose to 73% among 35- to 45-year-olds, and 90% among under 35s.
Only a quarter (26%) of clients said they have been asked by an adviser about what they value about their service, how it’s delivered, and what they would like to change.
Clients also thought technology could pose a threat to traditional financial advisers in the future.
Over four in five (81%) of the clients surveyed said they expect technology will, or is likely to, pose a threat to traditional financial advice methods in the future.
Tony Wickenden, managing director at Technical Connection (the technical insight arm of SJP), said: “Understanding what’s most important to the client, and keeping that at the forefront of the advice proposition, will ultimately lead to the greatest benefits for clients and the financial planning businesses supporting them.
“On top of this, understanding best practice; deploying workable strategies; and delivering the best possible version of informed client care through a combination of financial planning expertise, technology and wider appreciation of the economic and regulatory drivers, is a powerful mix. It’s one that sustainable, successful businesses have always employed and will continue to need to embrace going forward.
“Combining knowledge of what’s possible and what’s important to the client is what will deliver all important Advice Alpha. Namely the positive difference made to the client’s financial wellbeing by engagement of the Financial Planner.”
The Future of Financial Planning Report was curated by Technical Connection (the technical insight arm of SJP).
Research was conducted in February amongst 1,000 advised clients with a minimum of £50,000 in investable assets. A total of 200 financial advisers were interviewed by telephone from 200 unique advisory firms from across the UK.