The future is bright… but it will be a bumpy ride

We hear it all the time, but we live in volatile and challenging times, whether it is riding the wave of geopolitical uncertainty in the wake of over 64 national elections representing more than half the world’s population that took place last year, our own new government, the £22bn black hole and budget, the terrible wars in Ukraine and the Middle East, the threat of future pandemics and cyber-attacks, cancel culture, the hunt for clients and productivity, keeping up with regulation and technology, consolidation, burnout—the list goes on. We’re doomed!

And yet, in the middle of all this chaos, something remarkable is happening.

A golden age for financial advice?

If there’s one certainty in uncertain times, it’s that people need advice - good advice. Financial advisers and wealth managers across the UK are being flooded with inquiries from clients, old and new, desperate for guidance.

Think about it: taxes are in flux, regulations are tightening, the economy is wobbling, and next-gen wealth transfer is reshaping financial planning as we know it. This isn’t just a challenging time - it’s a pivotal moment where skilled advisers become indispensable. When the financial landscape feels like shifting sand, trusted professionals are the anchor.

Despite all the doom and gloom, the advisory sector is feeling surprisingly upbeat. A recent survey across different wealth management sectors showed that financial advisers are among the most optimistic, rating their outlook at 7.6 out of 10. Northern advisers, in particular, seem even more bullish. Meanwhile, Wealth Managers and Private Banks remain the most cautious, watching from the sidelines.

But why the confidence?

Resilience, reinvention, and the power of adaptation

For over a decade, financial advisers have thrived on resilience. The core strengths of the profession haven’t changed: deep client relationships, trusted, independent advice, and the ability to evolve with the times. Consumer Duty has added new layers of responsibility, but advisers are rising to the challenge.

Yet, challenges loom large. The cost to serve is climbing, regulations are becoming more demanding, and many firms are struggling to adopt the right technology to drive productivity. SMEs, in particular, feel stretched, grappling with limited resources and the ever-present risk of over-reliance on key individuals.

But with challenge comes opportunity.

Growth is on the horizon: whether through consolidation, expanding into new markets, or leveraging technology and AI to redefine efficiency. Many advisers see the current landscape as the perfect storm to fill the advice gap, engage next-gen clients, and tap into wealth transfer opportunities.

And AI? It's not just hype. It’s already reshaping how advisers operate. Productivity could skyrocket by 40%, and industry leaders predict that within 15 years, everything invented in the past 150 years will be reinvented with AI. The trick is using it right, where 70% of tech projects in financial services fail.

Resistance to change from your employees or stakeholders, not having enough resources, poor planning, and poor communication mean many firms burn cash on tech they never fully implement… so buy in and clarity are key.

But the firms who get it right? They’re going to lead the charge when it comes to delivering great customer outcomes and driving value into the business.

The Productivity Paradox: time to crack the code

When we ask advisers what’s keeping them up at night, the most frequent the answer is productivity. Everyone wants to work smarter, not harder. But despite firms rating themselves a 6 out of 10 on productivity, they admit that only 35% of their time is spent in meaningful client interactions - 20% lower than the top advisory firms.

So, what’s eating up the rest of their time?

Regulatory headaches, disjointed internal processes, and outdated systems that don’t talk to each other. While silos and poor communication only add to the chaos.

The top firms are tackling this by streamlining their operations, integrating AI and automation, and making smarter tech investments. The results? Faster workflows, better compliance management, and more time for actual advising - not paperwork.

The war on talent

While tech is revolutionising the industry, financial advice still comes down to people. The challenge? There just aren’t enough advisers.

Talent retention is a huge issue, with firms struggling to bring in new blood. Our industry still tends to fly under the radar with most new recruits falling into this sector by accident. Also, many recruitment efforts (especially academies) focus on younger talent, but second-career professionals - those looking for a meaningful shift later in life - are a massively untapped resource. Given the complexity of financial planning, these individuals often bring the depth and client empathy that high-net-worth individuals crave.

And it’s not just about hiring - it’s about keeping people engaged. Advisers who invest in professional development, mentorship, and flexible career paths are going to be the ones who win in the long run.

Clients are changing: is the industry keeping up?

Even as firms race to keep up with regulatory shifts and tech trends, client acquisition strategies have barely evolved. For the past 18 years, referral business has been the bedrock of financial advice - and while that’s not changing, it’s not enough anymore.

The next wave of clients - Millennials and Gen Z - have different expectations. They’re digital-first, value-driven, and demand transparency. The size of the prize is estimated at £5.5 trillion pounds, and it is said that two thirds of inheritors will not use their parents’ adviser after they receive an inheritance, and two thirds of women leave their adviser within a year of their partner passing away. Given that 60% of wealth in the UK will be in women’s hands by 2025, as an industry we need to react. The firms that thrive will be those that build tech-enabled, highly personalised client experiences throughout the family. Yet, shockingly few advisers are leveraging AI-driven engagement strategies or broadening their service offerings to capture a larger share of wallet.

It’s an open goal, and only a few are taking the shot.

Regulation: burden or opportunity?

It is clear there is a lot of frustration around the cost and burden of regulation at the moment. On one hand it is great to see the regulator being more visible and transparent with data and user cases. However, when we asked advisers what they would change if they were in charge of the FCA, the answers were pretty brutal and included being tougher on rogue operators, providing more clarity around what good looks like, and incentivising advice to reduce the advice gap. There was a real sense that parts of current regulation are cumbersome, inconsistent, unclear, and not delivering meaningful returns. There was also a sense that the regulator itself was too cumbersome and needed scaling back.

As an industry it is easy to use the regulator as a scapegoat. However, if we are really honest with ourselves, it is difficult to point to any meaningful innovation in our sector that has not been driven by regulation. While the added burden of compliance is frustrating, we must remember that it also presents an opportunity for firms to differentiate themselves. Take Consumer Duty which is encouraging better client experiences through more detailed documentation, reassessed fee structures, and more adviser training.

But it is expensive. Advisers estimate that 20% of their revenue is spent on compliance, meaning many firms are cracking the code balancing compliance costs while maintaining profitability.

Perhaps the most telling statistic? Over 70% of advisers feel underrepresented at an industry, business, and personal level when it comes to regulatory discussions. The frustration is real, and many are calling for smarter, more tailored regulation that acknowledges the diversity of firms rather than a one-size-fits-all approach.

The Bottom Line: a defining moment for financial advice

Despite the uncertainty, this is not the time to sit back and play it safe.

The firms that embrace change - whether through smart tech adoption, modern client engagement strategies, or innovative talent recruitment - are the ones that will define the next decade of financial advice.

Regulation is evolving. Client needs are shifting. AI is transforming the way businesses operate. Isn’t it time you came to join the debate and see how your peers are responding?

Call to action

The good news is that our calls-to-action cost nothing… only your time, and we will make sure it is well spent. If you would like the opportunity to strategise with other strategic heads from advice firms about the challenges keeping them up at night, here are three events that should be on your radar:

1. Retirement Matters April – Tuesday 29th April 2025, One Moorgate Place, London, EC2R 6EA
2. Winning Advisers North (for advisers with over £100m AUM) - 22nd May, Rudding Park, Harrogate (optional dinner the night before)
3. Winning Advisers South - 9th October, Tylney Hall, Hook, Hampshire (optional dinner the night before)
4. Retirement Matters October - Thursday 2nd October, The Royal College of Physicians, London

If you are interested in joining any of these events, please contact Clare Frost at Owen James (clarefrost@ owenjamesgroup.com / 01483 862695). Alternatively, please let us know if you would like to see the full Scene Setter findings to get a finger on the pulse of what’s hot and what’s not amongst your peers.

For nearly 20 years, Owen James has been hosting prestigious events that bring together senior leaders from the financial adviser and wealth management sector to collaborate and strategise with each other.

Our mission is to provide a platform for you and your peers to collaborate, share ideas and find ways to drive change forward at a business and industry level. The end game is to enable financial services firms to do better business - commercially, intelligently and ethically.

Coupled with our industry research called ‘The Pulse’, to help identify the biggest challenges keeping advisers up at night, we guarantee that our events are not talking-shops. Typically, our events are free and by invitation only - the only cost is your time and we will ensure it is well spent. We promise to wow you, ensure you walk away with at least three ideas that could transform your business and way of working, and give you the opportunity to ‘rub shoulders’ meaningfully with your peers. So, if you would like to hear more, please do contact clarefrost@owenjamesgroup.com.

Get in touch:

www.owenjamesevents.com
01483 862695
clarefrost@owenjamesgroup.com