Study reveals retirement plans of IFAs and financial planners and what is likely to happen to the funds they help manage when they stop work 

  • One in two (51%) IFAs and financial planners surveyed estimate that when they retire their firm will only keep up to 50% of the clients’ assets they currently manage, Investec Wealth & Investment study shows
  • Almost a third (35%) IFAs and financial planners surveyed say they intend to retire before they turn 50 and one third (34%) state the job has become too stressful

According to new research from wealth manager Investec Wealth & Investment (UK), part of Rathbones Group PLC, half (49%) of financial planners and financial advisers plan to retire during the next five years. 

The study among 100 financial advisers and financial planners across the UK, found that over a third (37%) are considering retiring within the next four years and 22% plan to do so in the next three years. On average, the research found they will retire when they turn 52 years old although as many as one third (35%) intend to retire before they turn 50. Just 6% will wait until they are 60 or older before they retire.

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 a sizeable proportion of the assets managed by IFAs and financial planners intending to retire soon could move to different wealth management firms when the advisers stop work. 

 
 

On average, the soon-to-be-retired advisers and planners surveyed each help manage around £34 million worth of assets, with more than one in ten (12%) managing between £50 million and £100 million. However, 51% of IFAs and financial planners interviewed estimate their firm will only keep up to 50% of the clients’ assets they currently personally manage, and just under half (48%) say their firm will keep between 50% and 75%. Only around 1% say their firm plans to keep between 75% and 100%.

Investec Wealth & Investment (UK)’s study found that there are a number of different reasons as to why IFAs and financial planners are intending to retire.  More than a third (38%) cite personal reasons and a third (37%) say the company they work for has been bought by another company or merged and they don’t like their new working conditions. There are also concerns about the state of the industry, with a third (34%) saying the job has become too stressful. 

Around the same number (32%) say there is too much regulation and red tape now, and a quarter (29%) cite health reasons. More than one in ten (12%) feel there is too much ‘noise’ – with constant distractions such as social media alerts on the stock markets, making it a very difficult environment to operate in.

 
 

Simon Taylor, head of strategic partnerships at Investec Wealth & Investment (UK), said: “Our research points to a number of concerning trends, with half IFAs and financial planners interviewed planning on retiring in the next five years and their employers not retaining all of their clients’ assets. As the sector is set to lose so many of its most experienced workforce, more must be done to make it an attractive career for new talent – both to the younger generation just starting out and those looking to switch from other professions. 

“We have been working with The Lang Cat on research which looks at the practicality of running models for advisers in the light of the current regulatory environment. The ways in which adviser firms operate and the tools and services that are available to IFAs and financial planners have a huge impact on their day-to-day workload, but also on the quality, value and level of service they can offer their clients. Having the right products and services at their fingertips means that IFAs and financial planners can not only build stronger client relationships but also win new clients – as well as reducing the administrative burden and allowing them to focus on the aspects of the profession that really matter.”

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 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 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

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