Adviser confidence has taken a tumble despite client satisfaction surging, a new study has revealed.
The Embark Investor Confidence Barometer, a twice yearly study of 1,000 people, found that adviser confidence in the future of the advice marked has dropped from 81% to 69% this year, while only 61% of advisers are confident in their ability to charge enough compared with 80% last year.
The results also showed a gender divide, with men more likely to report a lack of confidence than their female counterparts. Just over half (53%) of men felt confident in their ability to continue to charge enough, compared to 75% of female advisers.
Yet, at the same time, 85% of advised investors were satisfied with their advisers, while only 4% described themselves as dissatisfied. It marks a significant increase on the previous Barometer, which found 68% of clients felt satisfied and 8% said they were dissatisfied.
The vast majority (86%) of those surveyed cited their adviser’s ability to understand their needs as the area they were most satisfied with, while 84% said it was overall communication.
Meanwhile, eight in ten (81%) said they were satisfied with the investment recommendations offered by their advisers.
The high levels of satisfaction could lead to new business leads for advisers, says Embark Group, with 83% of clients comfortable recommending their adviser to friends and family.
The survey also showed that Covid-19 had not had a negative impact, with almost half of (42%) of advised investors developing a better appreciation of financial planning due to the disruption of the past two years.
Jami Drewett, group head of distribution at Embark, said: “Our results suggest some advisers may be going through a turbulent, even a confusing, time. If clients are highly satisfied with their adviser and if the last couple of years has even helped to boost appreciation of the value of advice, why aren’t they feeling more optimistic?
“Anecdotally, advisers are telling us that price pressure from the self-serve market, rising professional indemnity and FCA costs and even the weight of MiFID compliance are affecting confidence. However, advisers will always have one strong reason to believe in the health of the market – the value of advice. Advisers we have spoken to have been clear that while there will always be a conversation to be had on costs it does not need to be a differentiator.”
