Adviser Trends From Investment Trends Study

According to research by Investment Trends (Adviser Technology & Business Report – May 2024), as in other years, the key challenges advisers face are compliance and fulfilling regulatory requirements. Other challenges include internal administration, the cost of providing advice, protection against cyber security threats and due diligence.

The report shows that many advisers have made significant changes in light of the Consumer Duty rules that came into effect in July 2023 – requiring more resources and time. Many advisers are now phasing out lower value clients and reviewing how they serve this cohort of clients while changing their pricing model to show commitment to Consumer Duty.

The phasing out of lower value clients is a trend consistent with our own experience. We can support your new ways of working with these lower value clients. This includes charging flexibility allowing you to charge different service fees for different clients, in different wrappers and sub wrappers, setting fees to zero and by transitioning clients to be non-advised. We have done a lot of work over the last 12 months to improve our non-advised proposition based on adviser feedback and so you can be confident passing these clients to Transact if you need to stop advising them.

On average, firms are also spending more time on preparing client reports – that includes fact finds, risk profiling and investment selection. Partly due to the time taken to build reports and partly due to firm consolidation in the adviser market; the average head count in firms has also increased.

There is also more focus on high net worth (HNW) clients with portfolios valued at £250k+. Transact advisers serve a higher than industry average number of HNW clients (56% vs 47% industry average). The average of family linked and sole portfolios held on Transact is £440k.

What advisers want

From the Investment Trends report, advisers say they want enhanced digitalisation, greater integration of systems and improved ability to demonstrate value to clients to help them run their business more efficiently. These are our focus too.

Advisers serving HNW clients agree and add the need for greater focus on tax wrappers. Bonds and trusts are increasingly popular on Transact – as well as LISA, JISA and junior pensions – as part of inter-generational planning for HNW families. We have one of the widest ranges of wrappers available and have done a great deal to progress the digital onboarding and servicing of clients. Our improvements are detailed in this road map. There is still more to do, with bulk online appointments with online client playback rather than signatures where processes allow, but we estimate most of this work will be complete by next year. We will then focus on ongoing updates and improvements.

A significant area of focus for us has been the ongoing development of our integrations as we have APIs in place for transactions, valuations and remuneration reconciliation. We are doing more in this space as detailed in the article “Transact Integrations Benefit Transact Advisers”.

If you would like to know more about any aspects of the services we offer, please contact your regional Adviser Support Manager.

 

1. Introduction
2. TOL Recent Enhancements 
3. Transact API Integrations
4. Administration of Transfer Deposits From Third-Party Providers 
5. Adviser Trends from 2024 Investment Trends Study.
6. Transact-BlackRock MPS Goes Live on FE Analytics
7. Pension Scheme Death Benefits Post 6 April 2024
8. Succession Planning
9. Interest on Cash Deposits
10. Transact Events 2024