Only 14% say their firm has increased or will increase fees due to rising inflation. Nearly half (46%) think rising inflation will widen the advice gap.
But four in 10 (41%) agree digital advice offerings are key to closing the advice gap (London, December 2022)
Financial advisers say inflation is the number one challenge they face and think rising prices will widen the advice gap, new research shows.
A CoreData Research study of 266 UK financial advisers found that inflation is seen as the top business risk by some distance.
Nearly a third (31%) of advisers point to inflation as the single biggest challenge facing their business over the next year.
The second-biggest challenge is volatile markets, cited by a fifth (21%) of advisers, followed by the Ukraine crisis/geopolitical tensions (16%) and regulation (14%). Despite the scale of the inflation challenge, advisers have been reluctant to pass on higher costs to clients.
Only one in seven (14%) say their firm has increased or will increase fees due to rising inflation. The CoreData study, conducted in August, also shows that nearly half (46%) of advisers agree that rising inflation will widen the advice gap. This compares to just one in 10 (11%) who disagree.
However, advisers also think technology can play a critical role in making financial advice more affordable.
Four in 10 (41%) agree digital advice offerings are key to closing the advice gap – more than double the proportion that disagree (19%).
Advisers focused on mass market clients are more inclined to think digital advice can help close the advice gap (44%). Furthermore, nearly three in 10 (27%) advisers say their firm is looking to use technology to target investors lower down the wealth scale.
This increases to 30% of HNW advisers, indicating that those serving the wealthiest clients are looking to broaden their offering and help address the advice gap.
Andrew Inwood, founder and principal of CoreData said, “The advice gap is a long-standing industry issue but these findings show there is now real concern that decades-high inflation, which is fuelling the cost of living crisis, will exacerbate the situation.
“However, advisers also recognize that technology can help fill the yawning advice gap. Indeed, the rise of hybrid advice, along with subscription-based models, could prove instrumental in making advice more affordable and accessible.”