More than a third (39 per cent) of advisers said clients are less willing or unable to pay fees due to inflationary pressure.
A survey by Panacea Adviser, with responses from 234 advisers, revealed that 28 per cent were unsure if their clients were less willing or unable to pay fees, while a further 28 per cent said they did not think clients were less willing or unable to pay.
As part of the responses, one adviser said: “More and more are asking probing and often quite rude questions, but usually those are ones who have not been clients long or the ones which have not bought into the process or clients that are new.”
Another adviser said: “Fees have never been an issue with our clients, but we have noticed a reluctance to part with cash in expectation of having to draw on it either for themselves or to help family members out."
The survey found that nearly half of advisers (43 per cent) have seen increasing energy costs have a significant impact on their business, while 23 per cent stated seeing some impact and 34 per cent saw very little to none.
Many of the 34 per cent that stated very little, or no impact also commented that they work from home or had a fixed rate but had concerns about this changing.
However, the 43 per cent that commented on significant impacts said the increase in outgoings but fees staying the same has reflected on the reduced profits.
Additionally, Panacea said there was also a reluctance to recruit and to reduce face to face appointments due to rising fuel costs.
One adviser said: “Over 500 per cent increase in our electricity costs have been quoted.....and that is the lowest cost available to us”.
Another said “As with all businesses the rising costs, not just energy, but also compliance and FCA fees are giving rise to some major concerns.”
In addition to this, the survey asked advisers about the impact of the Financial Services Compensation Scheme levy on businesses and their cash flow.
Some 88 per cent of advisers said the FSCS had a huge or significant impact on their business, with only 4 per cent stating it had some impact.
Yet an FSCS spokesperson said there are a number of reasons for the financial harm that feeds into the compensation the FSCS pays, saying it was “conscious of how high compensation costs impact levy payers”.
“We are looking to support the industry by providing insights and an independent view on issues driving compensation costs,” it said.
“We also now publish our first forecast for the following financial year levy in November to help firms prepare, and currently we expect the 2023/24 levy to be around 20 per cent lower than this year.”
