Advice firm that embrace hybrid advice will thrive in 2022, according to Dynamic Planner’s CEO Ben Goss.
Goss believes sustainability, technology and the hybrid world are opportunities for firms to seize. He outlined five key themes he expects to see dominate over the next 12 months:
2. Hybrid models become an opportunity for differentiation. Hybrid approaches developed during the pandemic have become firmly established. The challenge now is for firms to enhance the virtual client experience, looking for ways to differentiate themselves through branding and online customer engagement.
2. Sustainability is not optional. If sustainability received a nudge into the spotlight from the pandemic in 2020, the past year has put it firmly centre stage. It’s looking increasingly certain that regulation will underpin the shift in the next 12-18 months by mandating sustainability as a part of suitability. Adviser education will be vital, as will simple tools and processes that enable firms to implement sustainability preferences in a consistent and repeatable way.
3. Consolidators look for efficiencies. The number of advice firms in the marketplace continues to fall – by 2% over the last 12 months, according to the FCA. We expect some of the consolidators to want to unlock efficiencies by centralising businesses around simpler propositions and shared customer experiences to drive productivity.
4. Regulation is laser-focused on suitability. From Consumer Duty to PROD, the regulator is looking hard at customer needs and how to meet them. The drive towards ‘risk-based journeys’ and the long-talked about Investment Pathways have the potential to create more activity in the direct to consumer space, presenting an opportunity to differentiate the value of personal, professional financial advice. PROD rules offer firms the ability to make their businesses more streamlined and efficient by focusing on target markets.
5. Inflation is back on the agenda. The outlook for inflation and interest rates is more uncertain than it has been in over a decade, while the road out of the pandemic is proving bumpy. These conditions mean it will be important for clients to be invested and to be diversified – and for advisers to use a risk-based cashflow planning approach that is equipped to model uncertainty.
Goss added: “From hybrid working to sustainability, the pandemic has accelerated changes in our industry that might otherwise have taken a generation. There are two ways to respond: to resist change or to embrace it. Advisers who focus on the needs of their customers, make use of the technology and tools at their disposal, and see change as an opportunity to demonstrate their value are well positioned to thrive in 2022 and beyond.”