Rathbones Group found that rising compliance and portfolio management demands have cut the time independent financial advisers (IFAs) spend helping clients with their financial affairs.
The study revealed that 77% of IFAs said compliance requirements limited time for financial planning, 69% said portfolio management tasks came first, and 49% pointed to a lack of admin support as a key issue.
Almost all advisers, at 98%, said that compliance and paperwork delayed portfolio changes, with 18% saying the impact was significant.
Looking ahead, 91% expected this burden to rise over the next three years.
Two-thirds (66%) of advisers said holistic, forward-looking financial planning set their service apart, especially as tax, pension and inheritance rules change.
Andrea Yung, investment director at Rathbones, said: “Advisers are under growing pressure from both regulatory requirements and time constraints.
“Many are spending more time on portfolio administration than on the strategic planning that advisers say truly adds value for clients.
“With 43% of advisers stating that their clients will place increased value on both financial planning and portfolio management over the next three to five years, the ability to offer the best of both worlds – tailored advice and high-quality investment solutions – is becoming essential.”
The study comes as Rathbones is preparing to launch an enhanced actively managed model portfolio service (MPS) to help advisers streamline portfolio management and meet regulatory requirements more efficiently.
The service is set to offer seven risk rated portfolios, with an ongoing charge capped at 0.5% and no discretionary fund manager fee.
Each model will use three Rathbones-managed funds as its core.
Saving time was the top priority when building portfolios for 60% of IFAs, followed by managing risk for 55%.
Advisers said they spent 34% of their time on client meetings and relationship building, 29% on financial planning, 21% on portfolio management, and 17% on other business activities.
When it came to building client portfolios, 72% followed in-house models, 69% built each client portfolio individually, 52% used third-party model portfolios, and 40% fully outsourced to a provider or platform.
