For many people who use a financial adviser, the prospect of them retiring is a source of genuine concern, according to new research from wealth manager Investec Wealth & Investment (UK) with one in five (20%) stating they are “very concerned” that their IFA or financial planner will retire, and a further 26% “quite concerned”.
Investec Wealth & Investment commissioned independent research agency Viewsbank to interview 535 UK consumers with stock market related investments between 30th June and 3rd July 2023
The study amongst 535 UK consumers with stock market related investments revealed that on retirement of their adviser, three in five (61%) will retain the same firm and use another professional within the company; 31% said that they will find another adviser for themselves and 8% said they will stop using a financial adviser altogether.
The concern over losing their adviser to retirement may be heightened by the fact that 21% of people believe their financial planner will retire within the next two years and 41% think this will happen within the next five years. Their fears are not unfounded and are backed up by other Investec Wealth & Investment research, which surveyed 100 financial advisers and planners about their retirement plans in January 2024, with almost half (49%) stating that they had plans to retire within the next five years. Around two in five (35%) said they planned to retire by the time they turn 50.
The research by Investec Wealth & Investment (UK), which provides products and services to help advisers build a competitive advantage and protect and grow their clients’ wealth, reveals that men are much more pessimistic about losing their financial adviser than women, with more than half (52%) of men saying they were either “very concerned” or “quite concerned” about the prospect of their adviser retiring, compared to 25% of women.
Nick Vaill, senior investment director at Investec Wealth & Investment (UK), said: “It is entirely understandable that clients often find themselves worrying about what will happen to their financial investments and affairs when their adviser retires. They are concerned about losing the personal attention and expertise they have come to rely on and are worried that any change in personnel could disrupt the continuity of their investment strategies that have been put in place.
“However, retirement is part of the natural course of life and most financial advisory organisations will have succession plans in place to ensure the smooth transition of a client’s financial assets to another qualified professional. We have seen the importance of advisers implementing a centralised investment proposition and working in conjunction with a Discretionary Fund Manager to better facilitate the sale of a business or hand over to a new adviser. Advisory models do come with additional administrate burdens and costs which may put off potential acquirers.”
