There is the potential for financial advisers to control three times as many assets as they do now, according to Paul Hogarth, CEO of Tatton Asset Management.
Hogarth told FT Adviser he believes the industry will “continue to prosper” as more people will need financial advice in the face of tax changes.
Hogarth said: “Within 10 years I think the adviser community will control three times as much as it does now.
“Maybe the number of firms will not grow to that degree but I think the control of assets will.”
He said despite consolidation he expects to see more younger advisers coming into the profession.
“The worry is that we are all getting older with the average age of IFAs creeping up,” he said.
“But now people are seeing it as a great profession.
“There is a massive demand for services and so much growth is available in the IFA community and IFAs can continue to prosper. When we look at the competition, it is very limited.”
Hogarth said more complexity in the tax system could bring more clients to financial advice firms.
“The need for advice gets greater and greater,” said Hogarth. “There is no competition from the banks anymore, so who are you competing against?
“You are competing with direct to consumer platforms but there is a limited audience of people who want to do it themselves.
“A more complicated tax picture is definitely going to help [advisers].”
Model portfolio services
Hogarth said this increased complexity has also seen more advisers using model portfolio services, like the ones offered by Tatton.
He added: “There is more and more complexity being built in, how can IFAs keep up with it and build their business?
“I think that is why MPS is doing so well. IFAs worked out it is not a good use of time to create and manage their own portfolios.”
He believes artificial intelligence will have a part to play in this growth, giving advisers more time to take on more clients.
“AI is going to come to the rescue. It really fits the IFA community. There are some pieces of software that can streamline the IFA business which will make them stronger,” he said.
“Advisers are very interested in how they can streamline what they do by adopting AI.”
In August it was announced Tatton was backing new financial advice consolidator, Absolute Financial Group, supported by Hogarth as by non-executive chair.
He told FT Adviser, firms not wanting to move their clients’ funds away from Tatton was one of the reasons the firm committed £15mn for the project.
tara.o’connor@ft.com
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