A new year has begun – but will it be a happy one for adviser businesses? The implementation of pension freedoms in 2015 was a big shake up which meant many more customers began looking for financial advice. The resulting ‘capacity crunch’ means that in 2016, firms need to continue segmenting those customers they really want to engage with.
There are still opportunities for growth, which will come through this focused segmentation, alongside a clear client value proposition – and acquisition. Training new, young advisers through ‘academy’ type structures is also vital, and exactly what this overstretched industry needs.
The use of technology is already mature in the market. To run an adviser firm you need technology to do the job properly, but looking ahead, the problem for small firms is choosing providers prepared to keep investing in the increasingly sophisticated technology they need. On the subject of technology, I often get asked about ‘Robo advice’ competing with adviser businesses. It might happen, but it’s just as likely that the same technology will be used to automate routine tasks and make face-to-face advice more efficient.
It’s often said that good people are the foundation to a successful business. But employees don’t just want a paycheck at the end of the month, and that’s not exclusive to the financial services industry. Some want an attractive bonus package, some want to work more flexibly… each employee is different. Small adviser firms don’t necessarily have the right infrastructure in place, so another challenge in 2016 will be to try and meet those individual needs better and recruit – and retain – good people.
Here’s to a happy – and prosperous – year.
Noel Butwell is distribution director at Standard Life