Almost one in five (19 per cent) UK adults with stock market related investments have struggled to find an IFA, financial planner, or wealth manager in the past 10 years, research has revealed.
Research from Investec Wealth & Investment, which gathered the views of 535 UK consumers, found the main reason for this lack of advice was due to consumers’ investment portfolio not being big enough, which was referenced by 41 per cent of respondents.
This was ahead of respondents not thinking the advisers they spoke to were very good (39 per cent), and advisers planning on leaving the industry or changing jobs (24 per cent).
Additionally, 24 per cent stated that the IFAs or wealth managers were too busy and didn’t want to take on new clients.
Investec Wealth & Investment head of strategic partnerships, Simon Taylor, said: “As more and more clients move into drawdown, the burden of work on those IFA’s left will only increase.
“Working with a DFM to alleviate some of this burden can significantly help to deliver the much-needed capacity to concentrate on the financial planning needs of clients.”
Advisers' response
The research also sought the opinions of UK financial advisers and planners and found 42 per cent said the current shortage of IFAs and wealth managers is set to increase in the future.
Some 5 per cent of those surveyed went further, saying it will increase “dramatically” over the next five years.
Conversely, around half (51 per cent) of advisers thought the shortage would decline over the next five years and around 7 per cent believed the current level of shortage will stay the same.
The top reason given for future adviser shortages was growth of the digital and tech wealth management platforms which will force more IFAs and wealth managers to retire (81 per cent).
This was followed by the industry struggling to attract enough younger talent (74 per cent), and that generally more IFAs and wealth managers are set to retire, (55 per cent).
Other reasons included the growing regulatory burden facing the industry (48 per cent), and the growth of artificial intelligence making some of the functions of wealth managers redundant (43 per cent).
Taylor said it’s “concerning” that the current shortage of IFAs and wealth managers in the sector could continue, particularly when the impact is being seen through potential clients being lost simply because advisers cannot take on new business.
Taylor stated more must be done across the sector to make it an attractive career for new talent.
At the same time firms need to ensure they have the right technology, tools and services to enable their IFAs and financial planners to focus on the aspects of the profession that really matter.
tom.dunstan@ft.com
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