Retirement of financial advisers is a source of real concern for clients, reveals new research

July 23, 2024

One in five (20%) people who use financial advisers say they are “very concerned” about the prospect of them retiring

Two in five (35%) IFAs say they plan to retire by the time they turn 50

For many people who use a financial adviser, the prospect of them retiring is a source of genuine concern, according to new research* from wealth manager Investec Wealth & Investment (UK). One in five (20%) state they are “very concerned” that their IFA or financial planner will retire, and a further 26% say they are “quite concerned”.

The study amongst 535 UK consumers with stock market related investments revealed that on retirement of their adviser, three in five (61%) will retain the same firm and use another professional within the company; 31% said that they will find another adviser for themselves and 8% said they will stop using a financial adviser altogether.

The concern over losing their adviser to retirement may be heightened by the fact that 21% of people believe their financial planner will retire within the next two years and 41% think this will happen within the next five years. Their fears are not unfounded and are backed up by other Investec Wealth & Investment research, which surveyed 100 financial advisers and planners about their retirement plans, with almost half (49%) stating that they had plans to retire within the next five years. Around two in five (35%) said they planned to retire by the time they turn 50.

The research by Investec Wealth & Investment (UK), which provides products and services to help advisers build a competitive advantage and protect and grow their clients’ wealth, reveals that men are much more pessimistic about losing their financial adviser than women, with more than half (52%) of men saying they were either “very concerned” or “quite concerned” about the prospect of their adviser retiring, compared to 25% of women.

Nick Vaill, Senior Investment Director at Investec Wealth & Investment (UK), said: “It is entirely understandable that clients often find themselves worrying about what will happen to their financial investments and affairs when their adviser retires. They are concerned about losing the personal attention and expertise they have come to rely on and are worried that any change in personnel could disrupt the continuity of their investment strategies that have been put in place.

“However, retirement is part of the natural course of life and most financial advisory organisations will have succession plans in place to ensure the smooth transition of a client’s financial assets to another qualified professional. We have seen the importance of advisers implementing a centralised investment proposition and working in conjunction with a Discretionary Fund Manager to better facilitate the sale of a business or hand over to a new adviser. Advisory models do come with additional administrate burdens and costs which may put off potential acquirers.”

Investec Wealth & Investment (UK) works closely with the IFA and adviser community by developing intuitive, market-leading products and services that help firms to build a competitive advantage and help their clients to protect, grow and tax-efficiently pass on their wealth.

It manages more than £40 billion of client assets under management and has 14 regional offices across the UK. From off-the-shelf products through to award-winning bespoke investment portfolios, Investec Wealth & Investment has solutions that will help firms to win new clients and build stronger relationships with existing ones.

For over 25 years Investec Wealth & Investment (UK) has worked with advisers and built thousands of trusted relationships, earned a reputation for outstanding service. As one of the UK’s leading wealth management companies Investec Wealth & Management (UK) focuses on a relationship-based approach to Financial Planning and Investment Management – and helping IFAs and their clients is its foremost priority. For more information on its services for advisers go to: https://www.investec.com/en_gb/advisers/products-and-services.html?section=Intermediaries&category=Financial%20advisers