Like Goldilocks’ porridge, the ideal financial planning firm of the future will neither be too big nor too small, but just right to adapt to a rapidly transforming world.

This ideal of a mid-sized firm with between five and ten advisers, backed up by smart technology and diverse specialities, is showcased in a recent report by AKG Research called Future of Advice – Beneath and Beyond.

The report notes the pressure on advice firms from the pandemic, but says the successful ones will be those who can see beyond the day-to-day struggle to a future that embraces the benefits of technology while preserving the human touch.

“It is difficult for advice firms to think beyond the immediate day-to-day pressures of responding to the massive impact that COVID-19 has had and is having,” AKG communications director Matt Ward told Wealth Adviser.

“But they need to look to the longer-term and particularly when so many firms are expected to leave the industry at a time when advice is needed so much, and demand is growing.”

The report found that more than half (53%) of advisers believe firms will shut down due to the pandemic, while 45% expect more advisers to retire and a third (34%) are forecasting a rise in the sale of businesses.

AKG says there is a powerful case for a medium-sized adviser business, that combine the good relationship skills and flexibility of smaller firms with the more hard-nosed business management acumen of the larger ones.

“A much more powerful case can be made on the basis of this analysis for the right sort of five-ten-adviser business, properly structured with strong technology, and a multi-specialist, multi-faceted approach,” the research report says.

Other issues of concern raised by advisers questioned by the AKG researchers included the rising cost of professional indemnity insurance, risk and compliance and MiFID II/ PROD.



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