Financial Planning firms that embrace change will be the winners despite FCA data revealing that revenue growth was weaker in 2019 than in previous years, according to Quilter.

The Financial Planning and wealth management firm also said it expects to see increasing numbers of Financial Planners continuing to work from home and possibly even relocating as clients embrace virtual meetings.

Scott Stevens, director of adviser recruitment and acquisition at Quilter Financial Planning, said: “Financial advisers have adapted remarkably well in the years since the RDR, with a dramatic shift to recurring revenues and ongoing fees over commission-led profits. The industry has shown itself to be incredibly adaptable, and those advisers that transformed their businesses have emerged stronger for it.

“However, business owners have also faced challenges. Today’s data from the FCA shows that across the market, revenue growth was weaker in 2019 than previous years. Political uncertainty over Brexit and the 2019 General Election led to some caution from investors and prospective clients, making it a challenging environment for Financial Planners. At the same time, the cost of professional indemnity cover, a substantial overhead for adviser firms, increased substantially.

Mr Stevens also said that the Coronavirus pandemic has created the opportunity for Financial Planners to prove their worth to clients and develop closer relationships with them.

He said: “The Financial Planning industry is a patchwork of local firms that are deeply rooted in their communities. This is a critical part of many firm’s DNA, but small businesses also face challenges and will need extra support when confronted with challenging trading environments.

"Looking ahead, we all know that 2020 is and will continue to be a uniquely challenging year...but we’re also seeing plenty of positive stories from businesses that are adapting. And firms that have developed close, trusted relationships with their clients are finding that their services are more valued than ever before, with clients seeking reassurance and expert support navigating economic uncertainty.

“And there are plenty of reasons to be positive. We know from our experience of the last financial crisis in 2008 that adaptable firms bounce back stronger and better than ever before. The ingenuity and entrepreneurial spirit saw Financial Planning firms embrace a challenging market and incoming regulatory reform, with many firms not just surviving, but thriving as they transitioned to fee based models.

“As we hopefully begin to emerge from another challenging period, firms that embrace change over the next couple of years will be the winners again.

“Similarly, we can also expect to see many clients relocating as their own employers pivot toward home-working. Advisers that have invested in building strong customer relationships will be able to retain those clients, even if they’re no longer based locally, and will be well placed to help them adjust their financial plans if their life goals, living arrangements, work and retirement plans change in 2020 and beyond.”