Covid-19 causes two thirds of advisers to reassess future plans

The survey found that more than half (55%) of advisers are worried about their firm’s profitability.

The disruption and uncertainty caused by the outbreak of coronavirus has already forced many firms to reassess their plans for the next few years. 55% are worried about the impact of an economic downturn upon their clients, more than a quarter (27%) expect to see a fall in the value of client assets, and 14% are concerned about a slowdown in demand for advice services. A fifth (20%) have cautiously placed plans on hold - including intentions to sell their firm, hire new staff, or invest in staff development.

Despite the challenging outlook, a number of firms have strengthened their resolve to grow since the start of the year. Almost two-thirds (64%) of advisers plan to grow organically, having identified opportunities to increase client assets within the next 3-5 years - up from 48% at the start of the year. While many recruitment plans may have been temporarily postponed, 31% expect to grow by hiring staff in the next 3-5 years, compared with 13% at the start of the year.

Jackie Boylan, head of FundsNetwork at Fidelity International, commented: “Our research highlights some of the very real challenges facing the advice sector in the short-term, following the spread of the pandemic. Social distancing rules have meant that advice firms have had to completely change how they operate - implementing new working practices, and in many cases, teams have had to grapple with new forms of communication and technology. On top of this, recurring revenues are under pressure given uncertain markets, while new clients may be holding off seeking financial advice until life becomes more like it once was. Against this backdrop it’s little wonder that firms are pausing to consider what comes next.

“However, the findings reinforce how resilient and adaptable today’s financial advisers are, considering new and different ways of supporting clients through continued uncertainty. Despite the challenges many face, the majority are more determined to grow their businesses than they were before the crisis.”