Half of firms are reviewing their client bases for potential segmentation ahead of the Advice Guidance Boundary final policy proposals, a new survey from Dynamic Planner has shown.
The survey found that the Advice Guidance Boundary Review is widely perceived as a source of potential opportunity for businesses. Almost half (47%) of firms see simplified advice as an opportunity for growth, while 40% see targeted support as a good opportunity. In contrast, 12% of respondents said they are waiting to see the outcome of the review and just 1% do not see an opportunity at all.
Smaller firms are particularly interested in the potential to provide simplified advice (60%), while larger firms are split, and are also more likely to take a ‘wait and see’ approach (15%).
As a result, 50% of firms are reviewing their client base for potential segmentation and 50% are reviewing the client acquisition strategy. A similar proportion (49%) are evaluating their technology.
However, advisers said the biggest challenge is balancing personal advice with scale (28%). Dynamic Planner said expanding the delivery of personal service at the core of the adviser-client relationship is not easy, particularly against a backdrop of Consumer Duty. This is particularly the case for small and mid-sized firms, who lack the resources and economies of scale of their larger peers.
Other challenges identified by advisers include economic conditions (19%), cybersecurity (18%) and AI (11%).
Chris Jones, financial services director at Dynamic Planner, said: “Change is coming from all directions. From the regulator, advice firms await the final outcomes of the Advice Guidance Boundary Review and potentially a new and broader definition of ongoing advice, among other possible changes.
“The regulatory regime could also become more streamlined and less risk-averse under the FCA’s new five-year strategy. Encouragingly, findings from Advice 2025 show an advice community that is not only ready but embracing the changes that lie ahead.”
Jones said that in the months and years to come, firms have an opportunity to play their part in redrawing the industry map.
“Customer-focussed technology will be key to supporting both established models and emerging digital-first services for lower-value clients. Evolutions to the charging model could include subscription approaches or the ability to pause the ongoing service. Targeted support may enable more people to access help with their finances earlier, meaning clients come to full advice more informed and in a stronger financial position,” he added.
