Our findings show that, on average, advisers are happy to take someone on as a client if they have around £50k to invest. At the same time, 20% of those advisers we spoke to said they would not take on someone unless they had closer to £100k - with others citing even higher levels of minimum acceptance criteria.
This points to there being quite a broad entry threshold into professional advice. And, while some people simply don't have sufficient assets to merit the cost of advice, or are indeed able to reach the minimum required for advisers to profitably help them, there are 3.7 million customers who are not only open to receiving professional advice, but also have more than £50k to invest.
We estimate this accounts for over £185 billion of non-advised assets.
This is clearly a great opportunity for advisers, and could be of huge benefit to a wide range of people.
The trouble is, if all these customers decided to seek out advice tomorrow there clearly wouldn't be enough adviser capacity to deal with them. In essence, there is a latent demand that far outstrips supply.
While some of the larger advisory businesses are developing significant digitalisation into the advice process, many will find it difficult to make the investment required to scale up and it's clear that providers can play a role in helping them do this.
As we move increasingly towards a ‘digital first' sector, there are clearly ways in which data can be collected and used more cleverly, removing some of the expense from the advice process and speeding up information flow.
Looking forward, the pensions dashboard will be a big step in the right direction. You could see how - in just a few years - clients will be able to track down and value their pensions online with advisers rather than hunt for reams of paper in dusty lever arch files from a previous age.
The ‘plastic bag of papers' client meeting will eventually be a thing of the past. Indeed, it will be increasingly difficult to obtain plastic bags, if we are successful in our efforts to combat climate change!
And beyond that, it's not hard to see how the dashboard will pave the way to ‘open finance', linking with already established open banking and bringing other financial products on board.
Many clients will find this transition difficult, of course, and it is up to the industry - providers and advisers - to support people on this journey.
Our research also pointed to those people with less than £50k in investible assets, who most advisers understandably find it difficult to help. We estimate there are 5.7 million of them. They may not immediately need full advice, but engaging them in their finances through guidance and warming them to the advice need that might arise later must be a priority if we are to prepare the next wave of clients.
Finally, we need to do more to help people understand the value of advice; that it is so much more than just a transactional service like many others they might pay for, and how it extends beyond just the financial aspects of managing money. It's clear from our research that there are large number of people who would benefit from taking advice but who don't understand enough about the cost and the value to engage.
This feels like a great opportunity to try and change that.
Jamie Jenkins, Director of Policy and External Affairs at Royal London
Jamie has worked in financial services for over 30 years, primarily in the area of pensions. Most of his career to date was with Standard Life Aberdeen, holding positions in Operations, Marketing, Proposition Development and Policy.
In 2017, Jamie was appointed by the Department for Work & Pensions to chair the Automatic Enrolment review on coverage, which resulted in the proposals to remove the Lower Earnings Limit from pension calculations and lower the minimum age for eligibility from 22 to 18.
Latterly, he held the position Head of Global Savings Policy, speaking to people all over the world about different retirement systems and how countries were facing up to the challenge of an ageing population.
Jamie was appointed as Director of Policy & External affairs at Royal London in January 2021.