Managing younger clients giving cause for concern, says survey

Online investment

Adapting to manage the needs of younger clients is a concern for over a quarter (26 per cent) of financial advisers, according to a new survey by investment manager, PortfolioMetrix.

The survey, with responses from 150 advisers from the UK, South Africa and the Republic of Ireland, also found a similar number (24 per cent) were concerned about compliance requirements and pressures, and 23 per cent worry about unprofitable clients.

Ben Peele, UK Managing Director of PortfolioMetrix, says: "Much has been written about the need for younger people to have access to financial advice and our survey shows it is an issue that a significant number of advisers are grappling with. While many people under the age of 30 may not have significant assets to invest right now, a Capgemini report last year highlighted that many advisers are not ready to manage intergenerational wealth transfer and that around four out of five beneficiaries will switch away from the original adviser. Clearly, finding a way to keep the surviving family of older clients with the firm is an issue that merits some careful thought by advisers."

The survey also highlights where advisers want to see efficiency gains. The top four areas include:

• Creating business scalability without adding extra staff (34 per cent)
• Preparing client review reports/packs (31 per cent)
• Finding new clients (28 per cent)
• Technology related frustrations and client information gathering and recording (25 per cent)

Peele says: "A Kitces Research study in 2019 revealed that the typical financial adviser spends no more than about 50 per cent on direct client activity-related tasks, and barely 20 per cent of their time actually meeting with clients. Being busy with multiple tasks creates a tendency for adviser business owners to "paper over the cracks with people" but scalability without extra staff is possible with the right technology. However, as a quarter of those we surveyed highlighted, technology is creating frustrations, so getting it right is a major hurdle that has to be overcome. Time spent researching and investing in the right tech can and does result in systems that deliver enormous efficiencies for firms of all sizes."