A new era for advice

Future-proofing the adviser and paraplanning industry is essential for its survival, and a key part of that is recognising and adjusting to the expectations of the younger generations of clients. Compared to the older cohort of clients, advisers report that clients under 40 are more willing to use digital tools and apps (80%), as well as expecting faster response times and 24/7 access (38%).

Our research also reveals that more than a third of advisers (36%) observe that clients under 40 are more focused on short-term financial goals but with time on their side, are more comfortable taking investment risk (50%). Yet just under one in five (17%) advisers say that this group exhibits lower confidence in making long-term decisions. This suggests a proactive opportunity for advisers to offer tailored advice/guidance while meeting these generations where they are – rather than hoping for them to walk in the door.

While human-led financial advice remains highly valued by those who use it, significant barriers prevent and discourage investors from seeking it out.

Among those that have chosen to go it alone, rather than have a financial adviser, the primary reason cited was simply it being too expensive (32%). Other key factors include not being convinced it saves money (29%), not wanting to pay (26%), and just not seeing value (22%).

There are also very clear prompts that increase the likelihood that investors will choose to lean on the expertise of advisers. These include a one-off/low-cost (55%), a digital portal offering (41%), a large market fall (40%), and exploring the options around drawing retirement income (40%). It is evident that guidance is often sought during uncertain times, something further underlined by the fact that around three quarters of investors (74%) contacted an adviser about volatility last year and 70% did so more often than before.

Crucially, the experience of those that use an adviser as part of their wealth planning is positive – 93% of investors that have done so think that advice represents good value.

The findings demonstrate there is a strong and growing openness among investors to using new technologies like AI, or to engage with future Targeted Support, for financial advice and personalised support.

Our research finds that half (49%) of investors see it as a good starting point before seeking advice with 9% comfortable using AI advice only. Around two in five (37%) would still prefer a human from the start. We also found that just under two thirds of investors (63%) say they would use free/ low-cost AI, with this figure rising to 88% among those aged 25-34.

With Targeted Support on the horizon, 70% of investors express an appetite for personalised nudges such as those some financial services firms or employers may soon be allowed to offer.

Among those who would be likely to use personalised support to help make financial decisions it is human advisers that remain the most trusted source (53%), followed by pension providers (33%). Notably, it is AI tools/apps (30%) that take third spot.

It is evident the human-to-human experience will undoubtedly remain critical to the process, with all signs pointing to a future where a hybrid approach becomes the default.

Advisers remain neutral on the opportunities Targeted Support will bring. Almost half (47%) are also neutral on whether the Advice Guidance Boundary Review (AGBR) poses a threat – although twice as many disagree that it poses a threat (36%) as agree (17%). Paraplanners share neutrality on Targeted Support (49%), but they highlight the ongoing uncertainty around what falls under advice versus support could ultimately increase compliance checks and administrative work. This suggests that while investors are open to engaging with new models, many in the advice profession remain cautious, seeing potential for additional workload without clear benefits.