The Future of Advice - Tipping the scales

Regulation, Government concern, consolidation, AI and changing consumer expectations are all shaping the future of financial advice.

Our annual report tracking the demand for, and the supply of, financial advice will be published on 14th June. We’ll be launching the report at a detailed briefing event for clients in the City on 14 June at 8:30am.

Here are a few sneak previews of what we’ve found – the consumer research was from a core sample of 3,000 adults at the end of May, with an additional boosted sample of 1,000 higher net worth adults, 43% of whom have a financial adviser today.

The need for advice is still strong – 29% of investors sought financial advice or guidance after this year’s Spring Budget

• 41% of advised investors contacted their adviser and 26% of non-advised investors sought this out. We can rely on the Government, changing tax thresholds and moving goalposts to fuel confusion and a need for help.

• The report shows that the number of people seeking advice has grown from 2022 to 2023.

Industry leaders anticipate no real change from the upcoming simplified advice regime

• Our non-attributable interviews reveal wealth, investment and advice bosses anticipate “not much” from the simplified advice regime and feel that they are fighting on multiple fronts, with Consumer Duty landing “like a Steinway piano on a big toe”. But one CEO observed that “from the boundary review we’re expecting that more helpful/personalised/opinionated guidance will be permitted in defined circumstances”.

We see gradual growing comfort with elements of digital advice

• In 2022, 50% of people were comfortable with having ongoing meetings with an adviser over video/zoom/or phone. There’s been a jump in this number which is higher in 2023.

• We also see a gradual increase in those comfortable completing questionnaires and fact finds online – this has gone up from 55% of people in 2022.

• And one-third of people remain fundamentally uncomfortable about any form of advice without actually speaking to someone.

AI is A-OK

This year we dug into how people feel about AI in the advice chain. The majority of people are uncomfortable about this playing any part in their advice or recommendations. Lots of people didn’t know. But 20% were comfortable with this. And this number is nearer 1 in 3 when it comes to comfort levels from today’s investors around this. This number was much higher than I’d forecast.

If I think back to when robos were launched in 2012, people were a lot more hesitant about the idea of algorithms and automation. They overwhelmingly wanted people to call the shots. Fast forward a decade, and for nearly one-third of investors to say they are comfortable with advice recommendations generated by AI – well, that’s mind-blowing.

You can read more detail on our report here. It’s packed with consumer research, fresh data, industry insights and tracked trends and has been designed to help anyone with a guidance, coaching, digital, hybrid or traditional advice model.

You can register your interest here or contact us for our detailed briefing event in City on 14 June at 8:30am. As an attendee you will get deeper disclosures and in-depth Q&As with authors of the report.

Thank you,

The Boring Money Insights Team