Financial advisers in the UK are looking at retirement planning and other sources to increase their revenues as flat asset prices are no longer driving growth.
According to the latest research from Canada Life, only 15% of advisers expects asset value to rise, propelling business growth in the next year, down from a third [34%] over the past five years.
The biggest single driver of growth is expected to be retirement planning, with six in ten advisers [58%] believing this area has the potential to increase revenues, followed by inheritance and wealth planning [51%] and pensions consolidation [45%].
"The increase in demand for advice has propelled this into the higher rank of business drivers. It's now a central part of advisers' income streams, making up a ‘big four' advice areas with retirement planning, IHT planning, and pensions consolidation.
"Overall, there are notes for caution as well as encouraging signs. The principle engine for wealth creation over the past 30 years has been the increase in asset prices for things like equities and residential property. Ultimately, that falling is a concern, be it because of Brexit or fears of a trade war," Neil Jones, tax and wealth specialist at Canada Life said.
However, to compensate for the shortfall, advisers are also placing increasing importance on other areas. There has been a significant uptick in advisers expecting business growth to come simply from the demand for advice, with over four in ten [44%] advisers seeing gains to be made in this area, up by seven percentage points in the past five years. Equity release is also increasingly expected to drive business growth [up six percentage points to 16%].
"What's encouraging is the way advisers are reacting by looking at other revenue streams. The demand for advice is growing rapidly, which we believe will motivate more advisers away from contingent charging towards a system in which people are paying for the advice itself," Jones added.