A recent study from CoreData into the effect Covid-19 is having on the UK advice industry revealed that high net worth advisers with less clients are enjoying tighter relationships with their clients and better job security than their mass market counterparts.
According to the study, which was conducted in June and involved 250 UK advisers, six out of ten financial planners are communicating with clients more during the pandemic and consequently enjoying stronger relationships with these clients.
The dynamic is split, however, between HNW and mass market advisers.
“A higher proportion of advisers focusing on mass-affluent and high net worth clients have ramped up levels of communication since Covid-19 and more are now benefiting from improved relationships,” the report states. “But a smaller proportion of mass-market advisers have increased communication and consequently far fewer report improved relationships.”
The study observed a similar trend with older advisers; of those in the industry for 30 years or more, “fewer have upped levels of communication and fewer say client relationships are stronger”.
And while UK advisers generally perceive their job to be safe – with only 5 per cent saying they’re worried about losing their job due to the pandemic and 2 per cent worried their firm will not survive the period – mass market advisers displayed an “elevated level of concern”, the report states. “A fifth worry about losing their job.”
UK advisers are still adapting to the changes brought about by the 2013 Retail Distribution Review, which saw a raft of rules and regulations brought in to the financial services landscape including the separation of ‘independent’ and ‘restricted’ advisers, raised education standards and restrictions on conflicted remuneration.
By 2017 adviser numbers in the UK dropped 25 per cent – from 40,000 to 30,000 – as many bucked against new business models and the education requirements.
According to the CoreData report, 19 per cent of respondents believe the Covid-19 crisis will lead to more advisers leaving the financial planning industry than the quantum that left in the wake of the RDR.
Again, the sentiment among mass market and older advisers is that they will be more adversely affected.
“The proportion expecting a larger exodus than under RDR increases to a quarter (25 per cent) of mass-market advisers and a third (33 per cent) of those working in the industry for more than 30 years,” the report states.