"Given the degree of uncertainty and disruption that society has faced so far in 2020, the value of structured and professionally thought through financial planning is significant."
The firms' research found that nearly one in five (19%) advisers are concerned about their ageing client base and one in eight (12%) are worried about marketing costs and how they will attract new clients. Subsequently, the research paper says more creative new business generation strategies need to be developed and advisers need to work harder at tapping into intergenerational and multi-generational advice opportunities by further extending existing client relationships.
The survey found that major life events such as buying a house or retirement are triggers that would make over a third (35%) of people more likely to seek financial advice. 12% say they always consult a financial adviser when making major decisions and nearly one in 10 (9%) have regretted not seeking financial advice on such decisions.
Only 24% of adults surveyed have seen a financial adviser to discuss financial planning in the past five years and 17% have done so in conjunction with their partner/spouse.
However, AKG and Charles Stanley say the Covid-19 outbreak has created an "immediate window of opportunity" as it has made people think about their financial situation. 40% of those surveyed have discussed their financial planning with their partner/spouse/friends within the past year and 29% have done so within the past month because of the coronavirus crisis. Just under one-fifth (17%) said they will have a need for advice due to Covid-19 and a further 27% are undecided.
Advisers are more optimistic and see a positive outlook for engagement, with 52% believing Covid-19 will increase demand for financial advice from existing customers, and 48% are of the view it will increase demand from new customers.
The paper highlights that the big question for the industry is how to convert this interest and these discussions with friends and family into meaningful engagement with financial advisers where these relationships are not in place.
John Porteous, group head of distribution at Charles Stanley, said: “Given the degree of uncertainty and disruption that society has faced so far in 2020, the value of structured and professionally thought through financial planning is significant. Equally, against a backdrop of market volatility and economic disruption, the value offered must be explicit and communicated in a fashion that resonates with clients. Increasingly, a positive value exchange cannot just be assumed – it should be agreed.
“The subject of intergenerational wealth transfer has historically been uncomfortable to broach – some even describing it as ‘taboo’. The lockdown of 2020 has made clients revisit what is really important to them (with the emphasis on health and happiness in a wider context of wealth) - in particular the importance of personal relationships and family. This has led barriers to be broken around emotive conversations. As we emerge into a ‘new normal’ it is highly likely that a redefined connection between multiple generations will be at the top of the planning agenda.”
