"The impact of this is already being seen through future potential clients being lost simply because advisers can’t take on new business."
- Simon Taylor, head of strategic partnerships at Investec Wealth & Investment
Research carried out among financial advisers and financial planners across the UK has revealed that 42% believe the current shortage of IFAs and wealth managers is set to increase, with around 5% saying it will increase dramatically over the next five years.
The survey, carried out by Investec Wealth & Investment, found that around half (51%) think that the shortage will decline over the next five years and 7% believe the current level of shortage will stay the same.
Amongst those who think the shortage will get worse, the top reason given for this is the growth of the digital and tech wealth management platforms which will force more IFAs and wealth managers to retire (81%). This is followed by the industry struggling to attract enough younger talent (74%) and that generally more IFAs and wealth managers are set to retire (55%).
Other reasons given for this future increased shortage are the growing regulatory burden facing the industry which will force more IFAs and wealth managers to retire (48%) and the growth of artificial intelligence making some of the functions of wealth managers redundant and forcing more to retire (43%).
The research also found that one in five (19%) UK adults with stock market related investments have struggled to find an IFA, financial planner or wealth manager in the past 10 years and that this shortage of IFAs is already putting off potential future clients.
The main reasons given as to why they struggled to find one was due to their investment portfolio not being big enough (41%), they didn’t think the ones they spoke to were very good (39%), the ones they spoke to were planning on leaving the industry or changing jobs (24%) and the IFAs or wealth managers were too busy and didn’t want to take on new clients (24%).
Simon Taylor, head of strategic partnerships at Investec Wealth & Investment, said: “It’s concerning that the current shortage of IFAs and wealth managers in the sector could continue, particularly when the impact of this is already being seen through future potential clients being lost simply because advisers can’t take on new business. More must be done across the sector to make it an attractive career for new talent and at the same time, firms need to ensure they have the right technology, tools and services to enable their IFAs and financial planners to focus on the aspects of the profession that really matter – delivering value to their current clients and having the capacity to take on new ones.”
