Advice firms face difficulties in attracting younger clients

10 June 2021

A number of advisers are facing hurdles when it comes to attracting younger clients, a new survey by PortfolioMetrix has revealed.

Just over a quarter (26%) of advisers said adapting to manage the needs of younger clients was a concern, while a similar proportion (24%) were concerned about compliance requirements and pressures.

Just over a fifth (23%) expressed worry about younger clients being unprofitable.

Ben Peele, UK managing director at PortfolioMetrix, said: “Much has been written about the need for younger people to have access to financial advice and our survey shows it is an issue that a significant number of advisers are grappling with.

“While many people under the age of 30 may not have significant assets to invest right now, a report last year highlighted that many advisers are not ready to manage intergenerational wealth transfer and that around four out of five beneficiaries will switch away from the original adviser.

“Clearly, finding a way to keep the surviving family of older clients with the firm is an issue that merits some careful thought by advisers.”

The investment manager said its survey had also shone the light on areas within the business where advisers would like to make efficiencies.

Over a third (34%) said they would like to create business scalability without adding extra staff, while 31% said they would like to improve the preparation of client review reports and packs.

A slightly lower number of advisers (28%) said they would like to become more efficient at finding new clients, while a quarter (25%) cited technology-related frustrations and client information gathering and recording.

Peele added: “A study in 2019 revealed that the typical financial adviser spends no more than about 50% on direct client activity-related tasks, and barely 20% of their time actually meeting with clients. Being busy with multiple tasks creates a tendency for adviser business owners to “paper over the cracks with people” but scalability without extra staff is possible with the right technology.

“However, as a quarter of those we surveyed highlighted, technology is creating frustrations, so getting it right is a major hurdle that has to be overcome. Time spent researching and investing in the right tech can and does result in systems that deliver enormous efficiencies for firms of all sizes.”

Professional Paraplanner