Advisers must be more creative in attracting new clients for future survival, according to new research

Getting creative

The Future of Advice – Beneath and Beyond, a new paper from independent analysts AKG and co-sponsored by wealth manager Charles Stanley, reveals that the most enduring and profitable advised opportunity is linked to the various retirement life stages of baby boomers and propositions must be developed to ride the wave of those in and approaching retirement.

Nearly one in five (19 per cent) of advisers are concerned about their ageing client base and one in eight (12 per cent) are worried about marketing costs and how they will attract new clients.  Subsequently more creative new business generation strategies need to be developed in the longer-term and over the short to mid-term advisers need to work harder at tapping into intergenerational and multi-generational advice opportunities by further extending existing client relationships.  

John Porteous, Group Head of Distribution at Charles Stanley, says: “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 (eye of the beholder). Increasingly, a positive value exchange cannot just be assumed – it should be agreed.”
 
Major life events or circumstances such as buying a house or retirement, are the triggers that would make over a third (35 per cent) of people more likely to seek financial advice.  One in eight people (12 per cent) say they always consult a financial adviser when making major decisions and nearly one in 10 (9 per cent) have regretted not seeking financial advice on such decisions. One-size doesn’t fit all, and different advice service models within the same organisation or separate but complementary types of adviser business can be developed, such as segmenting varying requirements by age or other characteristics or groupings.
 
These measures are critical as only 24 per cent of adults surveyed have seen a financial adviser to discuss financial planning in the past five years and 17 per cent have done so in conjunction with their partner/spouse. 
 
However, the Coronavirus has created an immediate window of opportunity as it has made people think about their financial situation. Forty per cent of those surveyed have discussed their financial planning with their partner/spouse/friends within the past year and 29 per cent have done so within the past month because of the coronavirus crisis. Just under one-fifth (17 per cent) said they will have a need for advice due to Covid-19 and a further 27 per cent are undecided.
 
Advisers are more optimistic and see a positive outlook for engagement, with 52 per cent believing Covid-19 will increase demand for financial advice from existing customers, and 48 per cent 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. 
 
Porteous says: “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.”