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New business drop sees advice firms adapt

30 July 2020

New business opportunities for advice firms slowed between February and May this year as the country suffered the effects of lockdown, but advice firms have adapted to meet the challenge, new research from Dynamic Planner has shown.

Nearly half (46%) of the 83 financial services professionals surveyed experienced a drop in the level of new business during the months from February to May compared with the final quarter of 2019, while a third (33%) said it was the same and just over a fifth (21%) said it was higher.

The majority of advisers said the biggest barrier to new business was the firm already running at full capacity (42%), while 20% admitted they did not have time to pursue new clients. A similar proportion (22%) felt there were not enough new business opportunities and 12% said they could not recruit enough people to meet demand.

A lack of time was also cited as an issue by advisers, with 38% of advisers admitting their new business process had slowed this year, while 60% stated it was the same and just 3% noting an increase in speed.

However, the survey also revealed a growing trend for the use of technology in engaging with new clients. Two fifths (40%) of advisers used video chat to conduct a first meeting for new business during the period from February to May.

A further 44% said they conducted new business meetings on the telephone, while 10% used email. Prior to a first meeting, just over half (51%) opted to initially communicate with a client by phone, with a quarter (25%) preferring emails and 17% employing video chat.

Yasmina Siadatan, marketing director, Dynamic Planner (pictured), said: “New business in the form of new clients, and new transactions from current clients, has come under sharp spotlight in recent months as advice firms seek to maintain and grow their revenues. With almost four in 10 firms reporting new business processes slowing in a COVID-19 world this has fast become a significant pain point for the industry.

“With 40% adopting video conferencing as a solution for the initial discovery meeting, use of technology is rapidly transforming the traditional landscape of financial advice, as it is with so many business processes across the globe. As one might expect, services such as online risk profiling (20%) and engaging client reviews on video (12%) are being deployed to maintain new business.”

Professional Paraplanner