Independent financial advisers (IFAs) and wealth managers expect investors to take control of their own portfolios in future, according to new research.
A survey from exchange-traded fund provider GraniteShares found that 60 per cent of wealth managers and IFAs expect clients to start managing their own assets such as ISAs and pensions over the next five years, rather than use a financial adviser.
Just 14 per cent expect their clients to manage their assets less, while 26 per cent predicted that the level of time clients spend on managing their investments will stay the same as today.
50 per cent of wealth managers and IFAs said more clients will start managing their own investments because there is an increasing amount of tools and features available to them to do this, such as digital wealth management platforms.
38 per cent cited the fact that there is greater access to market data, making it easier to decide on investment decisions, and the same number said it is because investors want to reduce the amount they pay in investment charges.
One in three (34 per cent) said it’s due to there being even more funds and investment products for investors to use that don’t require the need for a financial adviser.
Meanwhile, 26 per cent said it is becoming harder to find a good financial adviser with many retiring or leaving the profession.
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“The stock market volatility since the outbreak of the coronavirus pandemic has provided a backdrop for wealth managers and IFAs to demonstrate their worth in advising clients and adjusting portfolios to help meet particular investment goals,” said Will Rhind, founder and chief executive at GraniteShares.
“It has been a difficult time for all investors but there is no question that an increasing number are looking towards self-directed solutions to keep costs down.
“This is also happening because there is a combination of better information and more investment products available to investors than ever before.
“These products offer an array of different investment strategies and exposures.
“Some retail investors – especially the more sophisticated ones – may feel comfortable using these themselves without the need for any professional advise – but these new investment products also present an opportunity for IFAs and wealth managers to both help guide clients through the volatility and deliver better outcomes.”