Demand for financial advisers on the rise as client wealth soars
The average number of clients per financial adviser rose by 21% last year to 149, according to a report recently published by Nucleus.
The adviser-owned and driven wrap platform released its Annual Census Report on 4 July which revealed that average client numbers for financial advisers rose from 123 in 2017 to 149 in 2018.
The annual report is based upon survey results from over 400 advisers using the Nucelus platform.
One in five survey respondents expect the significant growth in client numbers to continue throughout 2018.
Not only are client numbers increasing, but the average values available to invest are also on the rise. The proportion of clients with more than £500,000 to invest has more than doubled compared to last year’s survey.
However, increased demand is leading to capacity issues, with 40% of advisers surveyed stating they are able to spend less than 20% of their time with clients or prospective clients.
On a more positive note, strong levels of turnover were delivered, with four in ten firms turning over more than £1 million.
However, many firms are struggling with increased business expenses. Many reported increases in their regulatory bill and additional costs associated with legislative requirements, particularly the Markets in Financial Instruments Directive (MiFID II) and General Data Protection Regulation (GDPR).
Almost a third of respondents (27%) cited ‘regulation’ as one of the biggest challenges facing the industry.
Cyber security also remains a key issue, with over three quarters of advisers surveyed rating this as a high or very high concern.
However, overall, 99% of respondents are confident about their future business for the next three years.
Barry Neilson, Chief Customer Officer at Nucleus, said: “The growth adviser firms are currently seeing bodes really well for the future.”
However, he warns clients cannot afford to get complacent, especially as capacity issues begin to creep in.
“Clients have big expectations for the quality of service they receive so the proposition must reflect this,” Neilson said.
Read the Nucleus report
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All figures correct as at 31.12.2019.