60% of advisers concerned about losing capital Schroders survey reveals


Some 59% of advised clients are concerned about the prospects of losing capital the 2023 Schroders UK Financial Adviser Survey has found.

This concern is likely to be driven by geopolitics with 66% of advisers expecting a higher level of disruption going forward.

The survey also found that 95% of advisers are having conversations with clients on merits of cash versus long-term equity investing, a 5% increase from a previous Schroders survey carried out in May this year.

In terms of specific challenges facing advisers 49% cited regulation as the main challenge, up from 32% in November 2022.

Some 69% of advisers anticipate that the Consumer Duty’s ‘fair value’ outcome will exert pressure on ongoing charging models.

Wealth transfer

There is a growing concern among advisers that their businesses could lose assets as wealth transfers between generations with the number standing at 63%.

However, despite the concerns, attracting younger clients is not a top priority for the majority of advisers evidenced by age profile of their client bases and the fact only 25% of advisers would provide advice to clients with less than £50k to invest.

Artificial intelligence

The survey shows that 70% of advisers are now embracing the potential of AI compared to 57% in May with 81% anticipate incorporating AI-based technology applications into their advice process in some capacity.

Outsourcing

Advisers are also increasingly relying on outsourced investment solutions to manage their clients’ assets.

Some 36% of advisers outsource more than half of their clients’ assets under management while 49% outsource more than a quarter.

Looking ahead, 27% of advisers expect to further boost their allocation to multi-asset funds in the next 12 months and 25% to Model Portfolio Services.

To read more on this topic, visit: 91% of advisers concerned about losing assets in Great Wealth Transfer

Gillian Hepburn, commercial director at Benchmark, said: “The Schroders UK Financial Adviser Survey continues to offer valuable insights to help track and evaluate the opportunities and challenges faced by advisers, as well as demonstrating the value of advice, whether this is having conversations about cash versus long-term investing or navigating through challenging markets.

“It is also intriguing to note the impact of Consumer Duty since its implementation and how advisers are starting to respond, adapt and understand its impact.

“We anticipate this to be an ongoing focus for advisers as they continue to review good practice and refine their own work in this area, particularly in the area of ongoing assessment of value using customer feedback.

“This year’s research has also highlighted the significance of two topics; the transfer of wealth and the impact of AI. While AI appears to have gained interest among advisers and a desire to understand the opportunities, the potential impact of wealth transfer is now recognised.

“However, according to the survey, advisers are still primarily focusing their efforts on older, wealthier clients, rather than broadening their scope to include women and the younger generation. Going forward, we hope to see increased engagement with these client segments, as in addition to addressing the advice gap, it will help to tackle concerns about potential asset loss.”

 



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