Tax and legislation had the largest impact on client behaviour over the past year, according to the latest findings from the lang cat.
The lang cat’s eighth annual State of the Advice Nation report found 39% of advice firms cited tax and legislative uncertainty as the biggest change in client expectation or behaviour. This was followed by investment attitudes and market sentiment (12%).
Advisers also reported higher expectations, media influence and misinformation, and client anxiety as key changes in client expectation or behaviour.
Despite this, advice firms reported a strong year, with nine in 10 enjoying higher turnover, while 78% expect profits to rise, with a third believing this will jump by more than 20%.
The report also highlighted a clear shift in priorities over the past year. Artificial intelligence continued to grow in popularity, with adoption of AI jumping from 29% to 60% year on year. At the same time, the number of firms who said they were unsure about adopting AI has dropped from 32% to 17%.
However, confidence in areas like governance and security have not kept pace, with more than a third (35%) admitting they are not confident in the data of AI tools used, suggesting a growing need for clear policies and regulatory uncertainty around usage.
Meanwhile, this year’s biggest frustration, from a regulatory standpoint, centres on data requests. Advisers described them as time-consuming and burdensome, with more than one in four firms saying they lose four to five working days completing requests, the strain being most acutely felt by smaller firms.
While firms cite unclear requirements, rigid formats and limited feedback, sentiment towards the regulator is not wholly negative. More than one in five advisers say they are confident in the Financial Conduct Authority’s ability to support the profession.
Steven Nelson, insights director at the lang cat, said: “Market volatility alongside political uncertainty have fed straight into planning and business decisions, and there’s no doubt 2025 has been a messy, demanding year. But there is optimism too with firms reporting record turnover and profits, as demand for advice shows no sign of slowing down.
“With workloads under pressure, firms are understandably looking for ways to work smarter, and that’s clearly accelerating the adoption of AI. It brings real opportunities, but also some challenges. If AI is going to genuinely strengthen advice delivery, it needs to be underpinned by clear boundaries, strong governance and proper training.”
As well as exploring business sentiment, the report also looked at ways to improve the number of people entering the advice industry. Nearly half (46%) of advice firms believe clearer entry pathways are needed to attract talent to the profession, while a quarter (24%) say it starts with financial literacy at schools. One in six (14%) believe profile raising of advice via mainstream society will help attract talent into the profession, while 7% said it requires provider/big advice firm academies.
Amongst the younger cohort, advice is increasingly being chosen as a profession, rather than something they’ve just fallen into. However, concerns were expressed by some respondents about the training and support given by their employers. Almost a third (30%) feel that this was inadequate and 38% see a lack of mentorship or guidance as the biggest barrier to their success.
Nelson added: “We hope the findings on new entrants give firms pause for thought. If the industry wants to attract and keep the next generation of advisers, it has to invest properly in onboarding, mentoring and ongoing support.”
Main image: pawel-czerwinski-qIZMt-o2RIk-unsplash
