Nearly 73 per cent of financial advisers believe the gap between those who get financial advice and who want it expanded over the last 5 years, with more than half describing it as “a lot wider,” according to new research.
More than six out of ten respondents to intelliflo’s 2022 Advisory Business Impact Poll think it expanded even more during the pandemic. In the past 12 months, more people have sought assistance, according to almost 58 per cent of the polled experts.
The majority of advisers, or about 84 per cent, haven’t noticed a change in the ethnic background, income level, or the proportion of women onboarded as clients, which suggests that the profile of individuals seeking out the advisory profession hasn’t changed.
According to the survey, 46 per cent advisers believe that the high cost of servicing these clients, 34 per cent a lack of time to service additional clients and the increased compliance load, prohibited 32 per cent of them from reaching out to more people who don’t generally seek assistance.
More than two-fifths engaged junior advisers to work with some lower-income clients over the past year, and the same accepted lower-income individuals as wealth-in-waiting.
The advisers surveyed acknowledge the potential of technology to close the advice gap. When asked what would make the profession more accessible to those who don’t generally seek assistance, 54 per cent of respondents stated that advisory companies should use technology more frequently, and 41 per cent said that consumers should use it more frequently.
Nearly 95 per cent of financial advisors in the poll agree that technology is essential for closing the advice gap and reaching people who don’t traditionally seek help.
intelliflo CEO Nick Eatock says: “As evidenced by our recent Advisory Business Impact Poll, many advisers are prevented from helping a wider range of clients due to a lack of time and resources. So how can our sector increase access to financial advice, particularly for households coping with financial distress?
“We firmly believe that adopting technology to its best effect will make it possible for the sector to reach thousands more clients and make advice more affordable and accessible. Embedding technology effectively into the advice process helps deliver cost savings through improved efficiency and economies of scale that firms can pass on to clients through lower fees. It can also deliver a business case for widening access to advise by increasing the commercial viability of working with clients with lower investible assets.”
Eatock adds: “To truly widen access to financial advice, we also believe that it’s extremely important to attract new talent to the industry, which is why we partnered with The Verve Foundation earlier in the year helping to finance the training, exams and upskilling of those looking to start their career in financial services.”