The rise of digital and tech wealth management platforms is causing the shortage of financial advisers in the UK to get worse, according to the industry.
Almost half of financial advisers and planners believe the current shortage of IFAs and wealth managers will increase or stay the same over the next five years, according to a study by Investec Wealth & Investment.
A top reason given by 81% of respondents to a survey for a worsening of the shortage was the rise of digital and tech wealth management platforms, forcing more IFAs and wealth managers to retire.
However, some 51% of the surveyed advisers think that the shortage will decline over the next five years around 7% believe the current level of shortage will stay the same.
Some respondents said the shortage was down to the industry struggling to attract enough younger talent (74%) and that generally more IFAs and wealth managers are set to retire (55%).
The “growing regulatory burden” on the industry was also given as a reason.
Investec Wealth & Investment also surveyed 535 UK consumers with stock market-related investments and found that around one in five UK adults with stock market related investments have struggled to find an IFA, financial planner or wealth manager to help manage their investments over the past ten years. The main reasons given was their investment portfolio not being big enough.
Simon Taylor, head of strategic partnerships at Investec Wealth & Investment, said more must be done to make the financial advice sector an attractive career for new talent and also firm needed to make sure they had the right technology, tools and services to enable their IFAs and financial planners to focus on delivering value to their current clients and having the capacity to take on new ones.
“As more and more clients move into drawdown, the burden of work on those IFA’s left will only increase,” he said.
