Alpha: Trust and Personal Relationships Most Valued Adviser Asset, Survey Finds

by | Jan 30, 2023

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Trust and the strength of personal relationships are the most valued assets financial advisers have, to help clients navigate and manage their financial futures, according to the Alpha FMC Financial Advice Survey released today. However, process inefficiency – the biggest area of concern for 43% of respondents – is an inhibitor to maintaining those client relations.

The survey, conducted by Alpha FMC and Adviser Home, the development platform for the financial advisory industry, questioned 64 firms throughout the UK. The study found that almost two thirds of respondents (66%) said trust and personal relationships were the attributes most valued by clients. The ability to alleviate financial stress and anxiety was the second most important attribute (59%) followed by the delivery of investment returns and the financial benefits of having an adviser (33%).

As for the challenges financial advisers face, the quest for process efficiency (43%) topped the list. Whilst 34% of respondents cited technology as an opportunity to grow and make their businesses more efficient, 33% of respondents said the impact of technology on their business is neutral and 31% said technology is actively slowing the business down. Adviser firms do not have the time they believe necessary to implement new systems and processes to improve the operational running of their firms.


Regulation matched process efficiency as a chief concern for financial advisers (43%) – the time and cost to demonstrate compliance is a significant headwind for the industry. The regulatory environment is set to get tougher with the introduction of the FCA Consumer Duty legislation in July 2023. Despite this deadline, a surprising 5% of IFAs were not aware of the incoming regulation and 11% thought that no action is required on their behalf in response to the Consumer Duty. Furthermore 92% revealed they had ‘no plans’ to alter their charging structure in light of the Consumer Duty, which highlights a lack of understanding of the ‘reach’ of the regulation. 

With regards to growing their businesses, over half of respondents said opportunities to increase the client book organically (53%) and attract intergenerational wealth clients (52%) are key drivers for growth. 42% cited improving business efficiency as a key growth driver. However, with the cost to serve ratio increasing, it is becoming increasingly difficult to serve lower value clients – 27% said they would no longer be able to service lower value clients. This trend is likely to widen the advice gap in the future. 

Bradley Northrop, Head of the Retail Distribution and Advice Practice at Alpha FMC comments: “It’s heartening that trust and personal relationships are still the most valued attributes in the financial advice industry. But they do require a significant investment of adviser time to build and maintain. This highlights the need for process efficiency and effective technology, areas that many adviser firms struggle with.


“Our survey’s results are indicative of where many IFAs are right now – they are keen to improve their offering and appeal to multi-generational clients but almost two thirds are behind the technology curve. They need to move quickly – a financial advice model enabled by technology empowers advisers, is customer centric, scalable and frees up advisers to do what they do best – have the conversations with clients about their financial circumstances and help them achieve better financial outcomes.”


Editors’ notes


Key statistics from the ‘Alpha FMC Financial Advice Survey’

  • Personalised customer engagement is a priority:

Providers are implementing a streamlined and personalised service focused on delivering value. Over 75% of respondents believe their clients value personal relationships as a top priority

  • Economic viability of client relationships remains a fundamental factor in the market:

18% of advisers admitted that changes would not be made to clients seen as not economically viable


But what actually defines an economically viable client? Answers ranged from £0 to £5m

·        Regulatory and compliance issues are at the forefront of concern amongst industry professionals:

The burden of regulatory compliance on financial advice is a barrier to entry and a material cost driver


44% of respondents view Regulation as one of the top three areas of concern in the industry

·        Digital capabilities are maturing:

Research evidences a greater use of technology and digital capabilities to optimise the advice process. However over 65% viewed the impact of their current technology as “neutral” or “slowing us down.

  • Consumer Duty regulations are being hailed as the biggest regulatory evolution in a decade

But 5% of financial advisers do not know what it means and its potential impact on their business. 92% revealed they had “no plans” to alter their charging structure in the next 12/24 months.

  • Advisers are constantly looking to align their services to meet the demands of the consumer:

Growing the client book and attracting intergenerational wealth clients were stated as key. Those who are not already acting need to move now

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