The cost of doing business is the biggest concern for financial advisers over the next year to two years, according to research from The Exeter.
The survey of 250 UK financial advisers found a third (32%) of advisers ranked the increased cost of doing business as their biggest challenge over the next 12–24 months.
Other key concerns include mortgage market instability (27%) and the continued pressure on consumer finances (26%).
One in five (21%) of advisers identified client retention as a key challenge over the next 12–24 months.
Regulation also remains a pressing concern for advisers, with 19% highlighting adherence to the Consumer Duty and potential new regulations from the Financial Conduct Authority (FCA) or government as significant concerns.
This comes as the FCA conducts its market study into pure protection insurance, focusing on competition in the market.
The research uncovered a gender split in levels of concern across several key challenges.
Male advisers were more likely to highlight financial and structural pressures, while female advisers expressed concerns over healthcare investment and its potential impact on demand for insurance products.
- The increased cost of doing business was cited by a third (33%) of male advisers compared to female advisers (29%) as a key concern
- Continued pressure on consumer finances was a greater concern for male advisers (29%) than for female advisers (20%)
- Changes to commission payment structures were raised by a quarter (26%) of male advisers, compared to under one in five (18%) of female advisers
- Meanwhile, government investment in the NHS proved more of a concern for female advisers (24%) than their male peers (20%)
Karen Woodley, head of healthcare distribution at The Exeter, (pictured) said: “These findings highlight the numerous challenges advisers will face over the next two years.
“However, advisers should remain confident in their ability to overcome these obstacles, having successfully navigated economic pressures, market uncertainties and regulatory reviews in the past.
“From an insurer’s perspective, we are dedicated to supporting advisers to ensure we deliver the best outcomes for both new and existing customers.
“While it’s essential to help more people benefit from insurance, it’s equally important to focus on those who already have cover.
“With one in five advisers identifying client retention as a key challenge and ongoing financial pressures being placed on consumers, it’s crucial for advisers and insurers to work together to keep existing customers engaged.
“This ensures their cover continues to meet their needs and they fully understand the benefits of their insurance.”
