Adviser numbers to drop as focus on new business shifts
03 May 2016
- Over half (51%) of advisers expect the total number of advisers to fall by 5% or more during 2016
- Almost half of advisers (49%) turned away up to five potential customers in a month
- Professional services referrals predicted to rise during the next 12 months
More than half of financial advisers (51%) expect the number of advisers operating in the UK to shrink this year, exclusive new adviser research from Prudential1 shows.
Its study into the new business pipeline of financial advisers, found that three in five advisers (60%) have, for various reasons, turned away a potential client in the last month. Almost half of those advisers (49%) have turned away up to five potential customers with one in 10 (10%) having to reject six or more people.
The research among 206 advisers nationwide found growing numbers of clients now come from the professional services sector, including accountants and solicitors. Just over one in ten (11%) say referrals from the professional services sector is the biggest contributor to their new business pipeline.
Over the next 12 months, professional services referrals are set to become more important as a new business source, with four in ten (40%) of all advisers expecting these referrals to increase.
However the quality of the advisers’ service proposition is the biggest driver of business for advisers. Almost seven out of ten (68%) say current clients act as their most important source of new business.
Paul Harrison, Head of Prudential’s Business Consultancy for advisers, said: “Analysis of advisers’ new business pipeline over the next 12 months reveals some interesting trends. What stands out is that the quality of the service and value added by advisers is increasingly a new business referral tool in itself.
“Although demand for advice has exceeded supply, the advice community has reacted strongly to increase capacity by streamlining and improving their service proposition.
“The past few years have been a period of sustained change for advisers so it is worth remembering and re-stating the real value of what advisers do for their customers.”
Additional factors which advisers say were the biggest source of new business were: being on approved supplier lists (7%), having an online presence (7%) and direct marketing activity (4%).
Notes to editors
1 Adviser research conducted by Opinium: Research carried out in March 2016 with responses from 206 financial advisers nationwide.