EV Financial Planning Insights 2024 - With Chet Velani

Chet Velani, Managing Director at EV, discusses the focus of EV during 2024 and the challenges and opportunities facing the financial planning industry over the next 12 months.

What are the biggest opportunities for the industry in 2024?

“There are so many incredible opportunities on the horizon. With the rise of AI adoption, we expect to see some amazing changes in delivering better customer outcomes. I'm particularly excited about the potential for digital and hybrid advice to flourish, especially since fee pressures are making it difficult for advice firms to compete, and the advice gap continues to widen.

Of course, there's always a degree of uncertainty regarding the market. With looming political tensions and global conflicts, predicting how things might play out is impossible. I believe the uncertainty we're facing right now is a wonderful opportunity for advisers to shine.

In particular, those who focus on assisting retirees will be in a great position to make a real difference in people's lives. And let's not forget about the ongoing advice/guidance boundary FCA review, which will surely shape our industry's future. We may not see the effects of this review right away, but I can't wait to see how it unfolds in the coming years.” 

And what are the biggest risks?

“The current market conditions are highly volatile and uncertain, and the regulatory authorities are implementing the "Consumer Duty" to bring about significant changes in the industry practices. This move is expected to expose existing processes and bring new challenges for firms offering closed products/services, which must now brace themselves for the upcoming deadlines.

Adding to the pressure, the FCA’s thematic review of retirement income advice will likely highlight the differences in the advice process for individuals in different financial life stages.
This will emotionally impact the people involved, particularly those in life's accumulation and decumulation stages.

The challenges are real, and the industry must prepare itself to adapt to the changing landscape. But with the right approach, firms can navigate these changes and emerge stronger, more resilient, and better equipped to serve more customers in the future.”

What do you expect to have the greatest impact this year?

“It's important for advisory firms to keep up with the times and adapt their services to meet the needs of a new generation of consumers with different financial profiles. Technology will play a crucial role in making the industry more efficient, and encouraging consumers to take control of their finances can help to reduce costs and improve overall profitability. Plus, by serving more consumers, everybody wins. As technology providers start incorporating AI into their services, I believe AI will become an increasingly important tool in financial planning.”

Are there any market trends our audiences need to be aware of?

“I am excited about the continued shift towards hybrid and digital advice models catering to a wider range of individuals. It’s amazing how digital advice provides financial institutions a cost-effective way to serve more consumers. This has been of great interest over the past 12 months, and I can confidently say that this trend will continue throughout 2024. However, there is some ambiguity surrounding the line between advice and guidance. It's a bit concerning because it may cause uncertainty in this area. Companies may be unable to wait for a solution to emerge, so they must act promptly. Let's hope they can find a way to navigate this grey area so that everyone can benefit from the convenience and affordability of digital advice.

What would you do if you had a magic wand?

“Great question. I’d have to say more firms are embracing digital and hybrid advice models so we can make financial support more accessible to more individuals. This creates an opportunity to bridge the gap between aspirations and reality, enabling people to achieve their goals and fulfil their dreams.”

To recap - do you have any other comments?

“The financial planning industry in 2024 presents a world of opportunities driven by AI adoption, digital and hybrid advice models, and market uncertainty. As we look ahead, the future promises innovation, growth, and transformation. However, the evolution of Consumer Duty and future regulatory reviews pose significant risks that we must address head-on.

As we move forward, we must focus on adapting to a new generation of consumers who demand more personalised and efficient solutions. We must leverage technology to innovate and stay ahead of the curve, keeping abreast of market trends, such as the shift towards digital advice and business consolidation. 

Ultimately, we aim to ensure widespread access to financial advice and support through innovative solutions like digital platforms. Everyone deserves access to sound financial planning and guidance, especially those nearing retirement. Together, let’s navigate the challenges, seize the opportunities and create a future where financial planning is within reach for all.