Fee concerns weighing on advisers’ confidence
Clients happier than ever with quality of advice
Advisers’ ability to understand needs impresses clients
A record number of clients are happy with their financial adviser, according to the latest Embark Investor Confidence Barometer.
Only nine (4%) of 250 advised consumers said they were dissatisfied with the advice they had received in the last 12 months, while 85% declared themselves satisfied (with 38% very satisfied).
This is a marked increase from the previous Barometer, when 68% said they were satisfied and 8% indicated they were not so.
Similarly, the vast majority (83%) said they would be comfortable recommending their adviser to friends and family, with only 5% uncomfortable.
However, confidence among advisers in the future of the market and in their ability to remain profitable is declining, particularly among male advisers.
In the latest Barometer, only 61% of advisers were confident in their ability to continue to charge enough, compared with 80% in the previous Barometer. Similarly, while 81% of advisers were previously confident in the future of the advice market, this has dropped to 69%.
Male advisers were less optimistic on both measures. For example, confidence among men in their ability to continue to charge enough, in the latest Barometer, was 53% (31% neutral). Among female advisers confidence was 75% (11% neutral).
Since appointing an adviser, clients rate their ability to understand their needs above the strength of their retirement advice or investment recommendations, according to the latest barometer.
While advisers performed well in every category, clients said they were most satisfied with their adviser’s understanding and communication.
Almost half (42%) of clients also said one positive outcome from the Covid-19 pandemic had been a better appreciation of the value of financial planning.
“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. Amidst all this, there’s something else too: requests for pay rises. One adviser described this as a ‘huge issue’ now.
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. One said: ‘If you’re providing proper financial planning, building cash flow plans and delivering objective-based advice, I can’t imagine we have much to worry about’.”
Group Head of Distribution, Embark Group
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