Despite 68% of UK financial advisers
reporting more profitable operations
this year compared with 2015, low
growth in client funds is a potential
threat to future profits.
The average advised client balance is
now £135,000 ($174,644, €157,795),
up from £85,000 in 2010, according to
Investment Trends’ May 2016 UK
Adviser Technology and Business
Model Report , which surveyed 1,002 UK
financial advisers in May 2016.
However, future profit growth is under
threat, with the year-on-year growth in
average client balances flattening;
increasing by only £2,000 from 2015,
the slowest pace in five years.
Meanwhile, the time taken to provide
advice improved by only a few minutes
per client. The average time it takes an
adviser to prepare a suitability report is
now seven hours, down from 7.5 hours
in 2010.
“The post-RDR outcome of advisers
increasingly focusing on wealthier
clients appears to be coming to an end,”
said Recep Peker, head of research for
wealth management at Investment
Trends. “Earnings growth in coming
years will require a further push in
efficiency and the ability to service a
broader range of clients.
“Advisers see technology playing a key
role in helping address their major
challenges, notably business efficiency,
increasing client engagement and client
acquisition,” he said.
Warming to robo-advice
The majority of financial advisers
believe automated advice tools
(including robo-advice) have a place in
their businesses, and do not see
consumers going directly to robo-
advice as a challenge to their business.
Nine out of 10 advisers expect to
automate at least some advice
processes within the next three years,
with the primary goal being to use
automation to service a larger pool of
“Technology providers have the
opportunity to address the huge gap in
advice process automation tools found
by this study,” said Peker. “If
addressed, these tools could help make
advice accessible to a greater share of
the population again.”