NextWealth's Financial Advice Business Benchmarks 2023 Report, published today, reveals clear distinction between average advisers and Financial Planners.

Of the finance professionals surveyed, 60% described themselves as advisers, with 31% describing themselves as Financial Planners.

The research revealed several striking differences between advisers and Planners.

Planners generally charge more: 70.2 bps compared to 60.1 bps for those who define themselves as advisers.

Planners also have clients with higher average client portfolios - £487,000 compared to £223,000 for advisers.

According to the survey, Planners want to work with more younger clients than advisers.

Asked if they are looking to attract younger clients, 29% of Planners said yes, compared to just 23% of advisers. 

Advisers are also twice as likely to want to sell their businesses than Financial Planners (18% advisers compared to 9% of Planners).

Planners also demonstrated ambition across the board:

• 58% plan to grow by increasing assets (compared to 38% of advisers).
• 59% plan to increase their number of clients (compared to 46% of advisers).
• 34% plan to increase staff (compared to 18% of advisers).
• 17% plan to grow by acquisition (compared to 9% of advisers).

Financial Planners were early adopters of cashflow modelling which remains one of the key distinguishing factors, according to NextWealth. Some 54% of planners used cashflow modelling compared to just 18% of advisers.

Client portal use is also higher among firms that use the term Financial Planner at 70% versus 43%.

Heather Hopkins, managing director at NextWealth, said: “Financial Planner is a comparatively recent term and therefore it’s unsurprising that those who use this term are likely to be younger, with a quarter being under 45. They are also three times more likely to work for firms with Chartered status and nearly a third of our Financial Planner respondents hold a Level 7 qualification.

“The NextWealth view is that we will see a growth in the use of the term in the future, as it becomes more accepted as a door-opener to younger clients.”

Sally Plant, CISI assistant director, Financial Planning and education development, said: "The fact that firms using the term “Planners” were found to be more positive about the future than those with advisers will be good news for Financial Planning clients.”

• The results in the Financial Advice Business Benchmarks 2023 Report were based on a survey of 244 financial advice professionals conducted between 11 July and 21 August.