Home > Back to Publisher > Report Information

The Generational shift of Financial Advisors

Datamonitor
July 26, 2007
75 Pages - SKU: DFMN1536831

Abstract Table of Contents Search inside this report Related Reports

Introduction

This report assesses the issues that are arising from the aging of the financial advisor community. The industry is failing in its efforts to attract new, young talent and without this the question for providers is what will happen to advisors' businesses as they approach retirement. This survey aims to reveal the future plans of advisors and how they are planning for the future of their business

Scope

Survey conducted among 102 financial advisors revealing their views on a variety of investment choices
Analyses the position of various age groups within the industry, explores growth potential, and gauges advisor opinion toward various product areas
Covers the prominent issues affecting the financial advice market, discusses key current issues and a range of advisor opinions across age groups

Highlights

Reasons to Purchase

Identify market opportunities by discovering which product areas IFAs see as having the greatest potential
Identify the main client groups, as well as the most popular products and life providers in the eyes of financial advisors
Gain direct insight into the fears, concerns, and attitudes of financial advisors and their predictions for the future of the industry

Overview: Catalyst; Summary; Methodology; Executive Summary; Market Context:; Advisors are predominantly sole independent traders, with a low average case size; Advisors are cautiously optimistic over sales growth in the next 6 months; Distribution Dynamics:; Regulation and administration are the two biggest concerns for advisors in Q2; Advisors seem happy with the pace of change but are still uncomfortable with the idea of fee-based remuneration; Most advisor firms are small, but recruitment is not considered a problem; Table of Contents; Table of figures; Table of tables; MArket Context; The sample consists predominantly of sole traders; Advisors have retained an independent or whole of market model; The average case size in this sample is below £5,000; 42% of advisors in this sample have a majority of high net worth clients; The majority of business is currently conducted in pensions and life-based investment products; Advisors are losing business to online sales for simpler products; There have been few changes since Q1; The majority of financial advisors are cautiously optimistic; Advisors expect sales of most products to remain static over the next 6 months; There has been little definitive change from Q1; The outlook for life products is positive; Advisors are more optimistic over mutual funds than ISAs; Protection sales look to remain largely static, but some advisors predict a decrease; Advisors are most optimistic regarding pension sales over the next 6 months; Financial advisors are most positive towards Standard Life, Skandia, and Legal & General; Standard Life is a leading UK fund manager employing a ""focus on change"" investment philosophy; Skandia has been a prominent name in the UK savings & investments market in recent years; Legal & General has won a number of awards in 2007; Attitudes have remained similar to those in Q1 2007; Invesco Perpetual and Fidelity have the highest approval ratings from advisors in Q2; Invesco Perpetual is one of the largest independent asset management companies in the UK; Fidelity is the UK's largest mutual fund manager; HSBC is the least popular provider by a significant margin; Data; Distribution Dynamics; Confusing regulation is the biggest challenge for all ages of advisors; Younger advisors are more concerned about technological change; Over half the surveyed advisors believe providers are not helpful in quieting their fears; Paperwork is the key source of dissatisfaction for all ages of advisor; Most advisors feel comfortable with the pace of change; The younger age groups are most confident about keeping pace with change; Over half of advisors believe that better training is the answer; Most advisors remain reluctant to move away from upfront commissions; The 30-40 age group is most open to the idea of fee-based remuneration; Most advisors are concerned with loss of profitability when moving away from commissions; The predominant innovations have been in the area of delivery platforms; There is a close link between advisor age and enthusiasm for product delivery developments; Few advisors work in firms of more than 2 employees; Younger advisors are more likely to work in larger firms; Older advisors are ambiguous about retirement; The younger advisors work for firms with the best succession plans; Most advisors do not believe they have a problem with recruitment; Advisors are happy to handle recruitment without external help; Many advisors are ambivalent about forming a partnership with another firm; Most advisors would prefer to partner with accountants or other IFA firms; Reputation and a natural fit are the two most important criteria in financial advice partnerships; Data
APPENDIX: Definitions; Pension product definitions; Personal Pensions; Stakeholder Pensions; Group personal pensions; Employer Sponsored Stakeholder pension (ESS); SIPPs (Self Invested Personal Pensions); Definitions of distribution channels; Independent Financial Advisors (IFAs); Direct sales forces; Tied agents; Multi-tied agents; Bancassurance; Direct marketing; Telesales; Other; Matrix Definitions; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: What percentage of your business is conducted in each of the following areas?; Table 2: Over the next six months how do you expect sales in each of the following products to change?; Table 3: Over the next six months how do you expect sales in each of the following products to change?; Table 4: Which of the following statements best describes your attitude to these insurers? (Q2 2007); Table 2: Which of the following statements best describes your attitude to these insurers? (Q1 2007); Table 6: Which of the following best describes your company?; Table 7: What business model do you operate?; Table 8: What is the average case size of the business you deal with?; Table 9: Does more than 50% of your customer base have total liquid assets of over £200k? i.e would you describe more than half of your customer base as High Net Worth?; Table 10: Does more than 50% of your customer base have total liquid assets of below £30 000? i.e would you describe more than half of your customer base as Mass affluent?; Table 11: What percentage of your business is conducted in each of the following areas?; Table 12: I believe in the next 6 months the UK Financial Advice market will:; Table 13: Which of the following statements best describes your attitude to these insurers?; Table 14: Which of the following statements best describes your attitude to these mutual fund providers?; Table 15: Do you believe that providers will really work with IFAs to meet these needs and concerns?; Table 2: What do you find dissatisfying about your work?; Table 3: What could be done by providers to help you keep pace with change?; Table 18: What are the 3 biggest challenges facing your firm?; Table 19: What do you find dissatisfying about your work?; Table 20: Do you feel you are keeping pace with the changes occurring in the market?; Table 21: Do you feel you are keeping pace with the changes occurring in the market?; Table 22: What could be done by providers to help you keep pace with change?; Table 23: Do you feel your firm is open to the idea of removal of up-front commissions?; Table 24: What are the key challenges facing firms who wish to move away from upfront commissions?; Table 25: What have been the most interesting product developments over the last five years?; Table 26: How many advisors work in your firm?; Table 27: Are any members of your firm likely to retire in the next 5 years?; Table 28: Is there a succession plan in place?; Table 29: Are you facing issues surrounding recruitment of new advisors into your business?; Table 30: Do you feel that providers could do more to help recruit new advisors into the industry?; Table 31: Would your firm look to forming a partnership with another organisation?; Table 32: Which kind of partners do you think would be suitable for IFAs? (choose up to 3); Table 33: What qualities would you be looking for in such a partnership? (choose up to 3)
List of Figures: Figure 1: Almost half the Q2 advisors surveyed are sole traders; Figure 2: The majority of advisors operate an independent business model; Figure 3: Most participants deal with an average case size of less than £5,000; Figure 4: Younger advisors deal with higher value average cases than their older colleagues; Figure 5: Less than half the sample have a majority of high net worth clients; Figure 6: Over half of respondents consider the majority of their customer base to be mass affluent; Figure 7: Almost a quarter more advisors claim a majority of HNW clients in Q2 compared to Q1; Figure 8: Pensions and life-based investments demonstrate the strongest business performance; Figure 9: The majority of advisors forecast limited growth when asked how the market will develop over the next 6 months; Figure 8: The majority expect life products sales to remain the same over the next 6 months; Figure 9: Non-life products may see a gradual increase in sales over the next 6 months; Figure 10: Some advisors predict a decrease in protection sales over the next 6 months; Figure 11: Personal pension sales look positive over the next 6 months; Figure 13: Skandia is the most popular insurer with advisors in Q2; Figure 13: Invesco Perpetual remains the most popular mutual fund provider; Figure 14: HSBC is the least popular mutual fund provide by some distance; Figure 15: Confusing regulation is one of the key challenge for almost two thirds of advisors; Figure 18: The Under 30s are worried about technological change; Figure 16: Over half of surveyed advisors had little faith in providers to help assuage their worries; Figure 17: Advisors are unconcerned about learning new products and technologies; Figure 18: Over half of advisors feel confident that they are keeping up-to-date with change; Figure 22: The 30-40 age group is most confident about the pace of change; Figure 19: The majority of advisors feel uncomfortable with the idea of removing up-front commissions; Figure 24: Only the 30-40 age group has a majority open to moving away from up-front commissions; Figure 20: Almost half of advisors are primarily concerned with profitability when considering moving away from up-front commissions; Figure 21: Delivery platforms are considered some of the most interesting product developments in recent years; Figure 27: Younger advisors are most excited about delivery platforms; Figure 22: How many advisors work in your firm?; Figure 23: Older advisors are far more likely to work alone than their younger colleagues; Figure 30: Retirement possibilities increase in firms with older advisors; Figure 31: Older advisors are less well-provided for in terms of succession plans; Figure 24: Recruitment of new advisors is most challenging in the 50-55 age group; Figure 25: Over two thirds of advisors feel they do not require recruitment assistance from providers; Figure 26: Advisors between 30 and 50 are least open to the idea of a partnership; Figure 27: Over half of advisors say accountants would be a potential partnership choice; Figure 36: A natural fit is the most important quality in an IFA partnership

The Generational shift of Financial Advisors

Share this report

Other tasks

Research Assistance

Related Markets

Financial Planning Reports

Free Alert Me service