The average advised client balance is now £135,000 ($174,644, €157,795), up from £85,000 in 2010, according to Investment Trends’ May 2016 UK Adviser Technology and Business Model Report, which surveyed 1,002 UK financial advisers in May 2016.
However, future profit growth is under threat, with the year-on-year growth in average client balances flattening; increasing by only £2,000 from 2015, the slowest pace in five years.
Meanwhile, the time taken to provide advice improved by only a few minutes per client. The average time it takes an adviser to prepare a suitability report is now seven hours, down from 7.5 hours in 2010.
“The post-RDR outcome of advisers increasingly focusing on wealthier clients appears to be coming to an end,” said Recep Peker, head of research for wealth management at Investment Trends. “Earnings growth in coming years will require a further push in efficiency and the ability to service a broader range of clients.
“Advisers see technology playing a key role in helping address their major challenges, notably business efficiency, increasing client engagement and client acquisition,” he said.
“Technology providers have the opportunity to address the huge gap in advice process automation tools found by this study.”
Warming to robo-advice
The majority of financial advisers believe automated advice tools (including robo-advice) have a place in their businesses, and do not see consumers going directly to robo-advice as a challenge to their business.
Nine out of 10 advisers expect to automate at least some advice processes within the next three years, with the primary goal being to use automation to service a larger pool of clients.
“Technology providers have the opportunity to address the huge gap in advice process automation tools found by this study,” said Peker. “If addressed, these tools could help make advice accessible to a greater share of the population again.”