Almost two-thirds (64%) of advice firms have altered their future business plans due to Covid-19.

According to new research from FundsNetwork one in 10 (10%) say they face “significant challenges” to their business ambitions over the next 3-5 years.

More than half (55%) of those surveyed were worried about profitability.

The three most likely negative changes are lowering the value of assets and recurring income, putting future plans on hold and expecting a slowdown in client demand and new business.

Despite the views, many planners (64%) also expect to grow organically over the next 3-5 years and 1 in 3 expect to be recruiting again.

FundsNetwork’s IFA DNA researched 100 advisers about the impact of Covid-19 on their firms.

Fidelity says the findings suggest the disruption and uncertainty caused by the outbreak has forced many firms to reassess their plans for the next few years.

One in five (20%) have placed plans on hold - including intentions to sell their firm, hire new staff, or invest in staff development

Impact of the coronavirus crisis upon firms’ plans for the next 3-5 years

 Source: Fidelity FundsNetwork

Yet many advisers remain positive. Almost two-thirds (64%) plan to grow organically, having identified opportunities to increase client assets within the next 3-5 years - up from 48% at the start of the year. While many recruitment plans may have been temporarily postponed, almost a third (31%) expect to hire staff in the next 3-5 years (13% at the start of the year).

Jackie Boylan, head of FundsNetwork at Fidelity, said: “Our research highlights some of the very real challenges facing the advice sector in the short-term, following the spread of the pandemic. Social distancing rules have meant that advice firms have had to completely change how they operate - implementing new working practices, and in many cases, teams have had to grapple with new forms of communication and technology.

“On top of this, recurring revenues are under pressure given uncertain markets, while new clients may be holding off seeking financial advice until life becomes more like it once was. Against this backdrop it’s little wonder that firms are pausing to consider what comes next.

“However, the findings reinforce how resilient and adaptable today’s financial advisers are, considering new and different ways of supporting clients through continued uncertainty. Despite the challenges many face, the majority are more determined to grow their businesses than they were before the crisis.”

Research was conducted in January and May 2020 by NextWealth.

• Financial Planning Today’s post-Covid-19 Financial Planner survey will be published in the next issue of Financial Planning Today magazine out soon.