Research from strategy consultants Opinium reveals that three-quarters (76%) of IFAs plan to retire in the next decade.
Around a third (31%) expect to retire in the next two-to-five years and 30% plan to stop work in the next five-to-10 years, the research found.
More than half (58%) of advisers have not yet made their clients aware of their plans to retire in the next 10 years.
When retiring, two fifths (40%) plan to sell their stake of the company and 16% are planning to merge their business with a similar firm.
Not enough advisers to cope with demand
Some three-quarters (76%) believe there are not enough advisers entering the industry to cope with future demand, while 60% believe there are not enough IFAs joining the industry to manage workloads; and over a quarter (27%) said that there is a lack of specialists in areas that need more of them.
When asked about the consequences of a lack of IFAs, 70% said fewer consumers would be able to access financial advice, nearly half (46%) thought consumers would suffer financially and 36% said certain areas of advice would have less resource.
In the event of the industry having insufficient IFAs to handle workload, over a quarter (26%) of those surveyed said more advisers would leave the industry, 20% thought that the quality of advice would decline and 18% expressed the view that robo-advice would become more popular.
Incentives
The advisers surveyed said that the best incentives for attracting more young people to the financial advice profession include better marketing (47%), better training and development (44%), financial incentives to join the industry (19%) and financial incentives throughout their career (19%).
Alexa Nightingale, head of financial services research at Opinium, said: “Given the number of IFAs planning to retire in the next decade and the lack of IFAs joining the industry, there is no doubt that there is a growing concern about the future of the financial advice industry.
“To ensure that financial advice does not become less accessible, it is important that incentives are put in place to attract the younger generation to join the financial-advice industry.”
