Financial Planning Growth Index Report (L.E.K. Consulting)

Summary

• 47% of financial planning firms are confident about increasing revenue over the next 12 months and 23% are very confident.p.6
• 42% of companies expect AUM to increase by 5-10% in the next 12 months and 22% expect it to increase by 0-5%.p.6
• For 40% of respondents, organic growth is the top source of business performance, with 32% citing client referrals and networking.p.8
• 29% of respondents cite regulation and compliance as their primary concern, with political intervention at 20%.p.10
• Over the next 1-3 years, upgrading existing systems (46%) and implementing new financial planning tools (36%) are the top technology priorities.p.12
• 26% of respondents anticipate that AI could significantly simplify the advice process, whilst 21% see it improving compliance efforts.p.14
• Retirement planning is cited as the top client priority by 31% of firms.p.15

Key insights

1. 37% of firms with AUM between £300m-£1bn+ expect an increase of 10-20%, compared to 16% of firms with AUM between £50m-£300m and 15% of firms with AUM below £50m.p.7
2. 18% of larger firms prioritise acquisitions, compared to 5% for those between £50-300 million and 1% of firms with AUM below £50 million.p.8
3. Rising operational costs were cited by 19% of respondents and talent acquisition by 8%.p.10
4. 33% of firms feel well prepared and 49% feel moderately prepared to face future challenges.p.11
5. 16% of larger firms consider themselves very well prepared, compared to 4% of mid-sized firms and 2% of smaller firms.p.11
6. Firms' two key business priorities for the next three years are improving operational efficiencies (22%) and enhancing the customer experience (20%).p.15
7. A widening advice gap is recognised by 16% of firms across all sizes.p.16
8. The survey covers senior respondents at 200 financial planning firms, with fieldwork from October to November 2024.p.2