UK financial advisers are struggling with capacity issues as they take on more clients while finding less time available to service them, according to a survey undertaken by adviser-owned platform company Nucleus.
This year's census saw responses from more than 250 Nucleus users, providing insights into their firms and the wider financial services sector, the company said in a statement as it revealed it findings.
Nucleus - one of the UK's fastest-growing platforms and the meeting point for over 870 adviser firms in total - surveys its users every year for its census, which, the company says "is designed to both engage with its users and ensure the platform is delivering what its clients need. Increasing capacity issues will continue to be an issue for financial advisers, with the average active client numbers per adviser increasing once again, up 9% to 163, with two-thirds expecting this number to rise in the next year.
“2018 was a challenging year for the financial advice market" - Barry Neilson, chief customer officer at Nucleus
This increase has impacted upon how advisers spend their time. Around a third of users said they spend 40% or more of their time on administration, a dramatic increase from only 11% last year. Meanwhile, only one in seven of Nucleus users spent more than 40% of their time with clients, down from one in five last year. This could be a consequence of complying with new regulatory requirements of Mifid II, GDPR and Prod introduced in 2018, requiring more time to be spent on making sure these were implemented effectively.
Despite these challenges, Nucleus users have increased the revenue of their businesses with 60% of firms seeing turnover of more than £750,000, compared to just over half in the 2018 census, and well above the industry average of £685,000. With advice in demand the census revealed that the second biggest opportunity for firms is seen in building and improving their business, with 96% of users also saying they confident about the future of their business over the next three years.
Barry Neilson, chief customer officer at Nucleus, said: "2018 was a challenging year for the financial advice market as a raft of new regulations including Mifid II, Prod and GDPR were introduced, increasing the burden of administration on firms. This data allows us to see how these challenges are impacting our users, and how we can help them navigate these and free up more capacity to deliver quality financial advice.
"While capacity issues appear like they are going to persist, it is motivating to see advisers relish the opportunity, converting new business, understanding their clients more and looking to address any residual recruitment problems. They are rightly bullish on the outlook for their businesses and the market and we are keeping a close eye on how these numbers may change over the next 12 months." Download a copy of the census.