Small advice firms have suffered the worst revenue decline, due to the pandemic according to Nextwealth.
Its annual adviser business benchmarks report surveyed 365 Personal Finance Society members over summer about the impact of Covid-19.
The study measures the effect of Covid-19 on gross revenue, projected growth and recruitment at firms across the profession.
Seventy-five percent of advisers say the pandemic cut gross revenue, with 30 per cent reporting they are down by more than one fifth.
Smaller firms with two to five employees are worst hit, as 83 per cent say the pandemic reduced gross revenue.
While a decline in new business is partly to blame, 44 per cent of financial planners say new client enquiries are now picking back up.
Client numbers are up year-on-year across the sample of firms, but growth is slower than last year.
Forty-five per cent of advisers are working with more clients than last year, but this is down from 62 per cent in the previous report.
NextWealth managing director Heather Hopkins says: “Financial planners adapted quickly to remote working but the inability to meet prospects face-to-face has taken its toll on financial advice businesses.
“All indicators point to a rapid recovery with new client enquiries picking up again as lockdown measures have eased.
“While technology enables the advice process, our analysis suggests that financial planning relationships still rely heavily on an initial trust-building face to face meeting.”
PFS chief executive Keith Richards adds: “This has been a challenging year for advisers, with the market turbulence earlier in the year and reduced opportunities to talk to clients face-to-face.
“We continue to work with the FCA to make sure that the regulatory burden, especially certain Mifid rules, continues to be eased or deferred as much as possible to allow the profession to focus on the needs of their clients and business.”
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