There is no getting away from the fact that 2023 will be a very busy year for Financial Planners and that, despite the grim economic backdrop, there are some positive signs.
Just to mention two key changes for planners coming up over the next 12 months; next year will see the Consumer Duty take full effect, changing the way the financial services sector engages with consumers, and the Pensions Dashboards will begin to take final shape and planners will need to understand more about how they will affect, and possibly disrupt, planning.
For planners both of these initiatives will bring necessary changes but also opportunities to move forward and grasp the potential. Firm should see them both as positives, not negatives.
We cannot forget, of course, that the economic backdrop is not good. A potentially severe recession next year will damage consumer confidence. The cost of living crisis will ease only slowly and most of us will face higher bills. While planners’ clients will be unlikely to face penury everyone will be affected.
Planners may well find financial plans changing and I expect the movement by many people to ‘unretire’ – especially those who gave up work during the pandemic – will gather pace.
Despite all this the longer term prospects for the Financial Planning profession still look remarkably rosy. A good example is that the pace of M&A activity in the sector is showing no sign of letting up. One one day this week alone Financial Planning Today covered four acquisitions.
With a wall of private equity money coming in, I expect the pace of M&A activity to remain hectic well into next year and likely beyond.
Many have questioned the motives behind flood of activity but at the very least it underlines the strong appetite to acquire well run, robust Financial Planning firms. This is testament to the Financial Planning model which is producing some very solid, attractive, professional businesses. It is no wonder other people want to buy them.
The buyers of these firms are no fools. They know they are buying businesses with strong income streams and potential for capital growth.
That’s not to say there will not be challenges next year – scam concerns will grow and complaints about investment and pensions are likely to increase says the FOS – but the sector is certainly one to watch. With the Chancellor placing high hopes on growth in financial services expect further efforts to stimulate expansion too.
I think that’s enough of the predictions for now. This column will be taking a short break to consume far too many minced pies and mulled wine. It will return in the new year.
In the meantime, have a restful and enjoyable Christmas and New Year and feel free to enjoy our content over the Christmas break. We’ll be here 24/7.
• If you are not already registered for Financial Planning Today website please take a minute now to register. Just click a couple of stories to see the registration pop up. Registering is quick, free and gives you access to much more content. Optional subscription upgrades provide unlimited content access plus a subscription to our regular Financial Planning Today magazine which is packed full of Financial Planning features.
