Overview- Almost half of advisers (49%) say clients are increasingly concerned about their financial wellbeing, according to Fidelity Adviser Solutions’ latest IFA DNA report
- The cost of living and inflation (87%) and market returns (74%) are the two main drivers of concern
- Over half of firms (51%) expect the demand for advice to grow over the next five years, with the complexity of personal finance (68%) and uncertainty of market conditions (42%) driving this growth
London, 9 November 2023: Advisers are experiencing increasing demand for client support in the face of economic challenges, with many concerned about its impact upon their financial wellbeing, findings from Fidelity Adviser Solutions’ latest IFA DNA1 study reveal.
Almost half (49%) of advisers say clients are increasingly worried about their financial wellbeing with levels of concern now at their highest since the launch of the IFA DNA study in 2020. Over four-fifths (87%) of advisers say that the cost of living and inflation are the main drivers for unease amid their client base, and doubts about market returns (74%) are also a significant factor.
Clients increasingly concerned about financial wellbeing
| 2021 | 2022 | 2023 | |
|---|---|---|---|
| % of advisers who say clients are more concerned than usual about their financial wellbeing | 35% | 46% | 49% |
Over half (51%) of IFAs expect the number of people seeking financial advice to increase over the next five years. Many have already seen evidence of this growing demand. Over nine out of ten (93%) of advisers have taken on new clients in the past 12 months compared with 91% a year ago and 84% in 2021.
The need for support in navigating more complex areas of personal finance (68%) is expected to be the main reason behind this demand for advice, along with increased awareness of the importance of financial planning (48%) and uncertainty of market conditions (42%).
Sam Christopher, Head of Proposition, Strategy and Growth for Fidelity Adviser Solutions comments: “The current economic backdrop means demand for advice is significant, with households seeking support to manage competing obligations while achieving their long-term goals. Uncertainty has characterised the financial landscape over the past few years, and it is evident that the toughening economic environment is taking its toll.
“In a challenging environment where clients are adjusting to higher interest rates and a cost-of-living crisis, an increasing number of advisers are reporting that clients are more concerned about their financial situation. And with concerns rising for the second year in a row - with more advisers noting increased concern among their clients about their financial wellbeing than during the pandemic - advisers have a vital role to play by helping clients navigate these challenging times.
“The need for financial planning has never been greater. We’re continually looking at the solutions we can provide to support advisers, as they help clients to respond to changes in their financial circumstances. Through our partnership with Conquest, we can offer services through ‘Conquest Planning’ - a financial planning software based upon analysis of data and Artificial Intelligence (AI). Advisers can benefit from the ease at which they can model different strategies for their clients to meet their financial planning goals.
“It is more important than ever for advisers to build strong and trusted relationships with clients. As these findings show, more and more people are recognising the value of financial advice and as an industry we need to look at how we fulfil this.”
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