The scale of M&A activity is a reminder that good quality Financial Planning firms are in huge and unprecedented demand. Their robust income streams, scalability and client demand for professional advice have all attracted millions in new investment into the sector. This is all positive but it’s not all plain sailing, far from it.

I was reminded of this during the week with publication of our latest issue of Financial Planning Today magazine - view free sample here: Financial Planning Today.

The issue includes our annual Financial Planning Profession Survey (thanks to all of you who took part, by the way) which showed a quite serious dent to planner confidence over the last couple of years.

According to our reader survey, the profession has seen a major slump in confidence over the past two years.

Just 45% of Financial Planners now feel positive about business prospects over the coming 12 months, about half the 86% who were positive in 2021 (just after Brexit).

Almost one in four planners and Paraplanners (23%) feel negative about prospects over the next year with the rest neutral.

For a profession normally bubbling with confidence these are poor figures indeed. Not catastrophic, just disappointing and out of character.

Planner clients, too, are rattled with 45% of readers also reporting that clients have contacted them this year with cost-of-living concerns or worries about having insufficient income in retirement. Interestingly, clients close to or in retirement were those most likely to be sharing concerns with their Financial Planners. 

Planners said clients were concerned about a number of financial issues affecting them in the pocket including recent rapid mortgage rate increases, concerns about poor investment performance, worries about retirement income and how to help hard-pressed children.

It’s all a reminder that confidence can be very fragile and planners can ultimately only reflect the confidence their clients are feeling. Here I would guess that some planning firms have been affected more than others. Some dealing only with very affluent or HNW clients may have felt little impact as clients concentrate on protecting wealth. Those dealing with families or self-employed people lower down the income scale may have felt more impact.

While all of this is unsettling the greatest asset that planners have is their long term approach. Winds may be blowing now but they will settle down and more normal times will return.

Most planners take a very long term approach to planning for clients and, in time, the current blip should be just a small notch on the growth graph.

Planners have been hit with many strong winds over the past decade or so: the 2008 financial crisis, the pandemic and now runaway inflation and the cost of living crisis. They will ride out the latest storm as they always have done and I’ve no doubt confidence will return. Planners are, inherently, riders on the storm.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days. Follow @FPT_Kevin