Multi-decade high inflation, the cost of living crisis, pension tax changes and Brexit are driving demand for financial advice, says deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organisations.
It reports that enquiries from existing and new clients combined were up 22% in Quarter 1 of this year compared to the same period in 2022.
Nigel Green, chief executive and founder of deVere, says: “There was a significant surge of client enquiries in the first quarter as people seek solutions to bolster their wealth and keep on track with their long-term financial goals.”
One of the primary contributing factors to the rise was due to sky-high inflation.
“It might be showing signs of cooling now, but people have been rightly concerned about multi-decades high and stickier-than-expected inflation in many countries around the world.
“It has meant that we’ve been working with clients to seek alternative investments because that inflation erodes the purchasing power of money over time, reducing the real value of the returns on many traditional investment strategies,” says the deVere Group CEO.
“As such, we’ve been helping clients consider less familiar, return-enhancing asset classes, which include venture capital, structured products, high dividend stocks, hedge funds and managed futures, and real estate, amongst others. They are also likely to increase diversification and reduce volatility due to their low correlations to the more traditional investments, and they can hedge some portfolio exposures.”
He continues: “Around the world, we’ve seen that there’s been a rise in the number of people considering moving overseas for a better quality of life, for better career opportunities, or a less expensive retirement, as a result of the cost of living crisis.
“This trend has bolstered the demand for cross-border financial advice as clients need to navigate complex, multi-jurisdictional tax laws, investment rules, and currency exchange issues, among other factors.”
Pension tax changes announced by Chancellor Jeremy Hunt in this year’s Budget in March have also been a catalyst for client enquiries.
“The shock announcements made in the Budget, such as the scrapping of the Lifetime Allowance, took everyone by surprise. Looking for solutions and clarity, clients rushed to advisers to guide them.”
Brexit has also been a factor in driving the uptick in client enquiries.
“Many of our clients have either voluntarily or involuntarily relocated for their jobs following changing market conditions due to Brexit. Again, this means that people require further financial advice as their circumstances change.”
He concludes: “I expect that most professionals in our industry would agree that Quarter 1 has shown that people are becoming more proactive about their personal finances and creating, building and safeguarding their wealth.”