Andrew Aldridge, partner at Deepbridge Capital sets out five key challenges for financial advisers in the year ahead.
1. Estate Planning
With IHT receipts continuing to rise and with perhaps a greater acknowledgement of mortality driven by the pandemic, inheritance tax mitigation will remain a key focus for many advisers. Earlier this year, we surveyed over 100 IFAs, with 80% agreeing that estate planning was a primary consideration.
With inflation increasing and rumours of interest rate rises, the search for growth will be important for many investors. Hardman & Co recently released a paper showing how early-stage private equity stocks, such as those available via the Enterprise Investment Scheme, can dramatically increase returns for a majority of clients, without altering their overall risk profile.
3. Green and ethical investing
COP26 once again highlighted the need for investment in green energy and renewable technologies. The UK Government continues to press ahead with ambitious plans to increase the availability of electricity from renewable sources and advisers need to be considering how they include renewables within a client's portfolio.
4. Soft Facts
With the increasing use of esoteric products, such as tax-efficient investments, which perhaps sit outside of centralised propositions it is ever more important that advisers record ample soft facts for compliance and technical support to review advice decisions more clearly. In our experience, when advisers say ‘compliance says no,' it is usually because they have not provided enough reasoning.
5. Customer Service
How advisers and clients decide what customer service looks like in the future will be a key consideration. An example being, whether clients want to return to annual review meetings face-to-face, or are they more confident now using video-conferencing and perhaps prefer more regular meetings via this medium?