Only 20% of investment advisers have a tailored sales and marketing strategy for younger investors. This is spawned from a concern among advisers about losing assets through intergenerational wealth transfers, which over two-thirds (62%) felt when asked in Schroders’ UK Financial Adviser Survey.
The report noted there has been a “sharp decline” in the number of advisers willing to accept new clients with less than £50,000 in funds, which will often be seen in younger people.
In comparison, more than half (52%) of advisers would accept clients with a smaller pot in 2019.
Just over a quarter (26%) accept that fund amount from investors, while the number of advisers willing to take on clients with £200,000 or more has shot up to 24% from 10% four years ago.
With the emergence of cryptocurrency and Bitcoin – whose value surpassed $100,000 this week – there are alternative and quicker ways to begin a financial investment compared to meeting with an adviser.
Wellness and wellbeing holidays: Travel insurance is essential for your peace of mind
Out of the pandemic lockdowns, there’s a greater emphasis on wellbeing and wellness, with
Sponsored by Post Office
Gillian Hepburn, commercial director at Benchmark – part of the Schroders Group – said at the launch dinner of the survey that the level of advisers accepting less than £50,000 from clients “remains stubbornly low” and commented on the industry’s progress with the advice gap.
Hepburn said: “Unfortunately, the numbers don’t quite add up. Yes, there’s concern, but are we actually addressing it? I’m not entirely convinced. I’ve been advocating for this for years and doing my best to raise awareness, but I think there’s still a long way to go on this front.”
One major factor in passing down investments to the younger generation is the concern about capital gains tax (CGT), which the Government increased in the Autumn Budget.
For the sale of shares, the lower rate of CGT increased from 10% to 18% and the higher rate up from 20% to 24%.
Gender advice gap
Another gap in the advice for investors is among women. The number of advisers with a dedicated sales and marketing strategy for retaining, attracting, and advising female clients nudged up by 2% to 12%.
But just over a third (34%) of women asked by Schroders said they would consider continuing with their family adviser if their partner died.
It follows a previous study from the asset management company, in which over three-quarters of women were dissatisfied with the value for money they felt they received from their adviser.
On the importance of providing better advice to women, Hepburn added: “At present, two-thirds of wealth is typically held in joint households, and the first point of wealth transfer is usually from husband to wife. That is predominantly what we’re seeing in this generation.
“Women tend to live longer, and they’re the ones inheriting the wealth.”
The Financial Conduct Authority (FCA) is in the process of reviewing the gender investment advice gap.
The regulator’s latest update in November said it will begin with addressing pensions before work on investments and financial advisers’ progress.
The FCA noted: “In December 2024, we will consult on high-level proposals for targeted support in pensions, which would allow firms we regulate to provide support to pension savers in a new way.”
