With so much talk of regulatory burden and the big boys starting to push smaller advisers aside, it can seem like there is no hope at all of new entrants breaking into the financial planning space.
It is not uncommon, at conferences and in private, to hear veterans of the market say things like “there’s no way I would become an adviser today”.
But since the festive season is upon us, we at Money Marketing are delivering a dose of optimism this week. We asked a host of advisers to add up the costs of building their advice firms from scratch, and provide some insight on what worked and what didn’t.
Was all the effort worth it in the end? The answer is a resounding “yes”. As long as advisers put the right building blocks in place, have a clear business plan and a coherent strategy, there is no reason 2019 can’t see a whole host of new firms springing up from nothing.
We can’t offer you a definitive blueprint for creating the perfect financial planning firm, but we can put the debate about the number of advisers and advice firms in the market into historical context.
It’s worth remembering that, before the RDR came into force, people also said no one would bother entering the market any more. In fact, the number of individuals advising has risen over the past three years. Even if they are spread across slightly fewer firms due to consolidation, there are still thousands of advisers in small, value-focused advice firms up and down the UK.
I’ll stress this again, too: salaries and profits continue to increase for planners, and will continue to do so as a simple by-product of the supply and demand mechanics in the market; adviser supply is not increasing quickly enough to match the surge in the post-pension freedoms demand for their services.
Adviser trade body Pimfa’s latest stats show that advisers are growing their client banks, but are also turning away more potential customers every quarter. That sounds like unmet demand to me, which a well-thought-out new entrant to the advice world – particularly one with younger advisers who are more savvy about marketing and digital services – could capitalise on.
Our Christmas present to the market can be passing on the words of wisdom from those who have been there and done it, breaking down any unnecessary obstacles – whether perceived or real – to going from zero to financial planning hero.
Justin Cash is editor of Money Marketing. Follow him on Twitter @Justin_Cash_1