Royal London: Advisers remain confident in their business resilience

Jessica Bird

June 3, 2020

advisers resilience

Advisers are optimistic about the resilience of their businesses in light of COVID-19, according to research by mutual insurer Royal London.

Feedback from 96 advisers in April showed that more than two-thirds (67%) expected to see business return to usual within three months of the end of the current crisis.

Nearly four in 10 (37%) expect this to take only one month, and only 10% expect this to take more than six months.

New business demand has dipped, but advisers say they are spending more time speaking to their current clients.

Six in 10 advisers have seen inbound contact from clients increase by 25%, with demand for reassurance on investments, information on furlough, self-employment and payment deferrals.

However, demand has grown for protection products in the current market.

Feedback also suggests that mortgage advisers are beginning to explore protection-related business opportunities, to boost resilience during a subdued housing market.

These high levels of adviser confidence were also evident in research the mutual insurer carried out with NMG before the crisis.

Responses from 426 advisers showed that while nearly half (48%) had been approached to either sell or merge their business in the last two years, only 17% were actively considering it, with the majority of smaller firms planning to stay independent.

Only one in 10 believed consolidation was the best option for clients and around one-third were investing in people to help grow their business and improve efficiency.

Helen Ball, group operations director at Tenet Group, said: “The findings of this research back up Tenet’s belief that the majority of advisers value their independence and the ongoing provision of independent advice for their customers.

“Being part of the Tenet network gives principals the option of a future exit, retiring from the industry in the knowledge that their clients will continue to receive quality independent advice, rather than sell them into a restricted model, with clients receiving a very different proposition.”

Tom Dunbar, distribution director at Royal London Intermediary, said: “Seeing advisers keeping calm and staying resilient in the face of COVID-19 is good news for the industry.

“While many will face challenges in the months ahead, it’s clear that the marketplace for impartial advice remains buoyant with advisers looking for opportunities such as within the protection market.”

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