Advisers believe that business growth and efficiency will be the biggest challenge they face over the next year, new research has found.
According to the 2020 census from adviser platform Nucleus, 30 per cent of advisers identified business growth and efficiency as their main concern, up from 19 per cent last year. This suggests that the Covid-19 crisis may have amplified this issue.
However, there has been a continued shift away from regulation being cited as a particular challenge.
Some 19 per cent of users felt regulation was their primary business concern, which is broadly in line with last year but down from 27 per cent in 2018.
Firms see the increasing demand for advice as the main opportunity for their business, with the need for financial planning services representing a major opportunity for 45 per cent of advisers, compared with 39 per cent last year.
However, the census also suggested that advice firms continue to struggle with capacity issues, and to make the most of the opportunity of the demand for advice.
Firms blamed time spent on compliance as the biggest driver for causing capacity issues with 51 per cent saying this limited their productivity.
42 per cent of users said an increase in demand for their services is putting a strain on their workload, and a further 40 per cent attributed capacity issues to spending time on processes that could be automated.
In order to become more efficient, 30 per cent of firms were exploring alternatives to face-to-face advice prior to Covid-19, compared with 25 per cent last year.
Another key business challenge to emerge was securing professional indemnity (PI) insurance.
Over half (52 per cent) of users found securing cover more difficult, and 62 per cent said it had become much more expensive. Half of all advisers found the renewal process more difficult than the previous year.
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“Our latest census has found advisers are increasingly concerned about their ability to sustain and grow their current capacity,” said Barry Neilson, chief customer officer at Nucleus.
“But it has also shown they are increasingly looking for new creative ways to communicate with clients, which will enable them to increase the time spent on their business.
“Advisers’ experience through Covid-19 is likely to embed this shift towards virtual communication and allow advisers to more frequently check in with their clients, perhaps instead of holding one or two face-to-face meetings a year.
“From our census we also now have hard data on how difficult it is for advisers to find PI cover, both in terms of availability and affordability.
“The lack of options is clearly putting advisers and planners in a position where they need to spend excessive amounts of money on cover which could have gone to servicing their clients or on business development.”