The majority of financial advisers, paraplanners and business owners feel optimistic about business in the coming months, despite concerns about external factors such as the economic recovery and cost of living issues, according to research by Standard Life, part of Phoenix Group.
Nine in ten (89%) advisers feel positive about their business in the year ahead, including 14% who are very optimistic. Just 11% feel pessimistic.
However, Standard Life’s research, conducted among 600 financial advice professionals, finds there are widespread concerns about external factors that could have more of an impact in the next year. More than two in five feel pessimistic about the economic recovery and investment returns (both 44%), while 70% are downbeat about cost-of-living issues.
Current challenges for advisers
When asked about the challenges advisers are currently facing in their business, market volatility was cited as the main issue, with 62% saying they are having to contend with this. Other significant challenges were:
- Servicing existing clients (36%)
- Consumer Duty (35%)
- Costs of running the business (33%)
- Compliance (33%)
- Cost of living issues (32%)
Chris Hudson, Retail Advised Managing Director at Standard Life, commented: “The economic environment has been particularly turbulent in the last year, and advisers have had to contend with and support their clients through unforeseen circumstances. While these and other challenges are likely to persist for some time, the fact that they are feeling optimistic demonstrates their resolve and the sector’s resilience in the face of uncertainty. Furthermore, significant industry developments like Consumer Duty are approaching which will put further strain on advice businesses. But such developments, along with recent changes to pension taxation and allowances in the Spring budget, create business opportunities to engage clients in value adding conversations.
“It’ll be a busy year for advisers, but with consumers facing a difficult financial climate and pressures on their ability to save, it’s more important than ever that they can rely on expert advice to help navigate this period.”