Advice firms must work harder to tap new advice streams

11 August 2020

Advisers need to think more creatively about how to attract new clients in order to survive, according to analysis from AKG and Charles Stanley.

In its paper entitled Future of Advice – Beneath and Beyond, nearly one in five (19%) advisers are concerned about their ageing client base and one in eight (12%) are worried about marketing costs and how they will attract new clients.

AKG said the findings highlight the need for advisers to work harder at tapping into intergenerational and multi-generational advice opportunities over the short term, as well as new business generation strategies in the longer-term.

According to AKG, firms must look at developing different advice service models within the same organisation or separate but complementary types of adviser business, such as segmenting different requirements by age or other characteristics to help broaden their approach.

John Porteous, group head of distribution, Charles Stanley, said the value of structured and professionally thought-through financial planning has grown in significance amid the Covid-19 pandemic.

Porteous said: “Against a backdrop of market volatility and economic disruption, the value offered must be explicit and communicated in a fashion that resonates with clients. Increasingly, a positive value exchange cannot just be assumed – it should be agreed.

Porteous added: “The subject of intergenerational wealth transfer has historically been uncomfortable to broach – some even describing it as ‘taboo’. The lockdown of 2020 has made clients revisit what is really important to them – in particular the importance of personal relationships and family. This has led barriers to be broken around emotive conversations. As we emerge into a ‘new normal’ it is highly likely that a redefined connection between multiple generations will be at the top of the planning agenda.”

The paper suggested major life events such as buying a property or retirement are the main triggers that would make over a third (35%) of people more likely to seek financial advice, with one in eight (12%) always consulting an adviser when making big decisions.

However, less than a quarter (24%) of adults surveyed had seen an adviser to discuss financial planning in the past five years.

AKG said recent events had highlighted a growing need for advice, with 29% of those surveyed discussing their financial planning with their partner/ spouse /friend within the past month as a result of the crisis.

Meanwhile, more than half (52%) of advisers believe Covid-19 will increase demand for financial advice from existing customers and 48% are of the view it will increase demand from new customers.

Professional Paraplanner