Clients are more concerned about their financial wellbeing now than during the pandemic, according to advisers – Fidelity Adviser Solutions

by | Aug 22, 2022

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Advisers expect to have a more significant role in helping clients to navigate economic challenges now than at any other point in the past three years, findings from Fidelity Adviser Solutions’ latest IFA DNA study reveal.

Almost three-fifths (58%) of IFAs expect the number of people seeking financial advice to increase over the next five years, up from 55% in both 2021 and 2020, with many already seeing evidence of this growing demand. Nine out of ten (91%) advisers have taken on new clients in the past year compared with 84% a year ago – with 16% of these taking on more new clients than usual, compared with 8% the previous year.

Advisers also report seeing an increase in the number of clients wanting support with intergenerational wealth transfer. More than half (55%) have noted an increase in demand for help – up from 36% last year – with 13% referring to this increase as ‘significant’ (vs. 1% last year).

Current and future demand for advice

 

  2020 2021 2022
% of advisers who expect the demand for advice to increase in the next five years 55% 55% 58%
% of advisers who have taken on new clients in the previous year N/A 84% 91%

 

The need for support in navigating more complex areas of personal finance (23%) is expected to be the main reason behind this demand for advice, along with growing awareness of the importance of financial planning (22%) and shifting personal circumstances (12%). Of those who expect to attract new clients in the next 12 months, 62% expect these to come from in the form of referrals from existing clients and contacts.

With economic challenges on the horizon, almost half (46%) of IFAs say their clients are more worried than usual about their financial wellbeing – up from 35% a year ago. The rising cost of living (39%), possibility of market decline (36%) and geopolitical uncertainty (33%) are all cited as causes for concern – with these headwinds the likely cause behind many clients evaluating their preparedness for retirement (34%).

Jackie Boylan, Head of Fidelity Adviser Solutions, comments: “The past few years have been characterised by change and uncertainty, prompting many of us to pause and reflect – considering both the challenges and opportunities these changes present. However, it’s clear the toughening economic climate is taking its toll, with advisers reporting more clients concerned about their financial situation now than during the pandemic.

“Many clients will be worried about the combined impact of market volatility and the rising cost of living upon their financial goals. Having a clear awareness of their income, outgoings and long-term savings is now more important than ever. Advisers have a vital role to play by helping them to consider different options and how to adjust their plans in the event their circumstances change.

“Key here is the ability to combine both soft and analytical skills – building strong, trusted relationships to gather the relevant information, while applying tools and resources to create a plan which helps them to feel financially secure. As these findings show, more and more people are recognising the value of financial advice and as an industry we need to look at how we fulfil this.”

Earlier this year Fidelity International partnered with Canadian FinTech company, Conquest, as the exclusive distributor of its financial planning software, ‘Conquest Planning’ to the UK independent advice market.

‘Conquest Planning’ uses data and Artificial Intelligence (AI) to provide advisers with greater insight into clients’ changing circumstances, allowing them to model recommendations in real-time and understand immediately how they might impact clients’ goals.

Jackie Boylan added: “’Conquest Planning’ processes data in a variety of ways, quickly building and comparing different plans within a consistent framework and improving the efficiency of financial planning. In turn, this creates more opportunities for advisers to support new and existing clients navigate the obstacles that lie ahead.” 

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