Fit for the future: how can IFAs meet the surge in demand for financial advice?

The financial advice scene in the UK is in the midst of a major transformation. With research suggesting a 30% surge in demand for professional guidance by 2028, it’s a golden opportunity for Independent Financial Advisers (IFAs) who are ready to adapt.

We explore what’s changing and how IFAs are gearing up to meet demand. 

Why the boom in advice?

A perfect storm of factors are all helping to fuel the fire, such as:    

Growing maze of financial products

The financial marketplace offers a staggering number of products and services, and even savvy individuals can feel overwhelmed. Clients are looking for clear direction, prompting them to turn to IFAs for expert insights. 

Raised awareness of financial wellbeing

Campaigns like the Money and Pensions Service 10-year UK Strategy for Financial Wellbeing have raised public awareness about the importance of managing finances effectively. These initiatives highlight the benefits of organising your financial affairs and maximizing the potential of your money and pensions. This, in turn, translates into more people looking for sound advice.  

Economic instability

Events like Brexit, the pandemic, challenging government budgets, and the geopolitical landscape have all highlighted the importance of sound financial planning. In volatile times, people want professional guidance that safeguards their economical wellbeing. 

Shifting demographics

With our population ageing, solid retirement planning is important Baby boomers approaching retirement need help ensuring their nest eggs and pensions will provide a secure future. The introduction of pension freedoms has added another layer of complexity, making professional advice even more valuable.

There’s also a new generation of young Gen Z and Millennial investors keen to make their money work harder and go further. With differing needs to older savers and a willingness to be guided by someone their peers trust, this still largely untapped market is a potential floodgate for IFAs.   

Barry Sime, Independent Financial Adviser at Fairstone Group Ltd adds:
“There’s never a shortage of new enquiries, generally from recommendations from existing clients. People also seem to be far more comfortable talking about money to their friends and family. So, when it comes to managing money and seeking advice, more individuals are more receptive to the idea of a Financial Adviser or Planner.” 

Getting ready for the influx

There are plenty of strategies IFAs can put in place to manage this potential influx of clients effectively. 

Embrace technology

More and more people – especially younger savers – expect to manage their money online. And over two-thirds of the UK (36%) now have a digital-only bank account – that’s around 19m people.

It’s clear that embracing tech is already a must. But as well as providing people with the tools they want to manage their money, there are significant benefits for advisers.  

Mining the data

Advanced data analytics allow you to gain deeper insights into clients' financial behaviours and preferences. For example, cashflow modelling software can analyse bank accounts, bills, and income sources, to generate personalised cash flow forecasts, and track savings progress. By identifying spending patterns and forecasting future cash needs, you can create data-driven, highly personalised financial plans that fit individual needs perfectly.  

Automation

Automation tools like Robotic Process Automation (RPA) use bots to automate repetitive, rule-based tasks, like data entry, data migration and verification, and report generation. As well as reducing mistakes, RPA streamlines operations and enhances efficiency. 

Going digital

Digital cash management platforms ensure you have: 

• constant visibility of your clients’ wealth 
• access to market-leading and exclusive interest rates 
• regular updates on clients’ maturing assets and the latest financial products
  

These platforms spark regular client conversations and cement your position as a proactive, trusted adviser who has their interests at heart.  

Robo-advisers

Robo-advisers are a growing force in the financial world. These online platforms use algorithms to provide automated investment management, with minimal human interaction.

Typically, they use online questionnaires to gather key client data around risk tolerance, financial situation, and the preferred return on investment. Based on this information, the robo-adviser can create a personalised investment plan and manage the client's portfolio accordingly.  

While they can never replace the human touch and experience, they can complement your offering by handling the more straightforward tasks. This allows you to focus on more complex, high-value services.

Five digital tools to enhance your cash management advice

Enhancing your skill set

Some firms are broadening their range of financial advice and services to cater to a wider clientele. Later-life financial needs, such as estate planning, tax optimisation – (especially around inheritance tax) – and long-term care planning are all relevant for many clients. This gives you an all-important competitive edge when attracting new customers and keeping your existing client base.

In a fast-moving and volatile financial sector, continuous professional development and training programmes are also important. By staying on top of the latest industry trends and regulatory changes, you can ensure you offer the most relevant and up-to-date guidance. 

Build a bigger team

It may sound counter-productive in tough economic times, but expanding your team is a positive investment in your business – and you. While it may be tempting to go it alone or stick to the small team, there’s a fine line between being financially prudent and continuing to provide excellent service.

“Consumer Duty is ensuring the industry only gives advice to clients that need it,” says Barry. “So, while there’s potentially some capacity being created for clients who need ongoing advice, it’s a challenge resource-wise to ensure the industry is geared up to support the ongoing influx of people looking to tap into our expertise.”

An overwhelming workload can also affect more than your ability to deliver the customer service you and your clients expect. Continued stress can damage both your physical and mental wellbeing.

With the trend now firmly tipped in favour of a personalised, client-centric approach, adding expertise to your team lightens the load of increased demand. This ensures clients and their savings are personally looked after. The result? Stronger client relationships, better financial outcomes, and enhanced wellbeing.  

As the financial landscape continues to evolve, the potential surge in demand for financial advice presents both challenges and opportunities for IFAs. By strategically scaling up, embracing technology and honing their skills, IFAs can manage the increased demand and deliver superior value.