Organic growth is becoming a top strategic priority for UK financial advice firms. Demonstrating client and revenue growth has become a more important barometer of business value, whether firms are large consolidators backed by provate equity (PE) or small firms with an eye on a future sale.
While most advice businesses often gain more clients than they lose, they typically generate only modest levels of new business. The principal constraint for most advice firms isn’t demand for their services – it’s capacity. Manual processes, from fact-finding to suitability reports and implementation, have long limited how many clients advisers can serve.
But that’s beginning to change. The widespread adoption of centralised investment propositions and outsourced portfolios has already boosted productivity. Consolidating assets onto fewer platforms is helping too.
Now, a new wave of transformation is underway, driven by automation and AI.
Nearly half of advisers say they are already using AI in their business – twice as many as last year
According to Platforum’s latest research, 85% of advisers are investing in AI or other tech tools, with AI investment and use seeing the fastest growth. Nearly half of advisers say they are already using AI in their business – twice as many as last year. The proportion saying they have no plans to use AI has fallen dramatically.
AI has therefore moved from theory into everyday use. The most common use case is transcription and summarisation. Around three-quarters of advisers using AI employ it for meeting notes. Firms report significant time savings for both advisers and support teams, though many acknowledge there’s still room for better integration and efficiency.
Marketing strategies are evolving too. While referrals and professional connections remain the main way that advisers source new clients, firms are increasingly optimising their content for AI to improve visibility in search and recommendation engines.
AI’s potential goes far beyond transcription and marketing. But its effectiveness hinges on data, which has often been lacking in quality, quantity or accessibility for many advice firms.
Advisers should train AI tools gradually ‘like a puppy’
However, increased regulatory pressure round data gathering and accuracy has prompted firms – especially larger ones – to treat their data management far more seriously. This, in turn, is laying the groundwork for more successful AI adoption.
There are early signs that advisers’ efforts to boost efficiency are paying off. Many advisers now report that they can serve more clients than before. Some firms are even broadening their reach beyond traditional high-net-worth clients, as seen in moves like Tavistock’s acquisition of Lifetime and AJ Bell’s launch of AJ Bell Touch.
But the landscape is shifting in more fundamental ways. The upcoming pension IHT reforms are prompting firms to reassess their business models.
While the changes are increasing demand for estate and tax planning, they’re also creating a short-term revenue squeeze – especially for firms reliant on fees linked to assets under advice. Much of advisers’ work involves restructuring existing clients’ finances, which generates little new revenue.
As regulatory and economic pressures reshape the advice landscape, firms are being forced to rethink how they grow
In response, firms are exploring new approaches: revising charging models to reflect planning work, expanding product ranges to meet estate planning needs, and strengthening intergenerational advice to retain family wealth.
With growth from existing clients slowing, many are placing greater emphasis on attracting new ones – and using AI to streamline processes and increase adviser capacity.
As regulatory and economic pressures reshape the advice landscape, firms are being forced to rethink how they grow. Technology, especially AI, is helping firms overcome long-standing capacity constraints, while the IHT reforms are pushing them to diversify, adapt and innovate.
The challenge now is not just to grow, but to grow smarter. Success will hinge on their ability to transform their businesses in response to shifting demands and opportunities.
Mariam Pourshoushtari is an analyst at Platforum. Its latest UK Financial Advisers: Market Overview report is available now
