Financial Planning continues to evolve and it’s clear that due to a number of pressures - and opportunities - many planners are shifting their focus to more upmarket clients with bigger portfolios.

A new study confirms what many have suspected: that planners and advisers are weeding out lower value clients and concentrating on those with more money.

There are two main factors driving this change: increased regulation from changes such as the Consumer Duty and the opening of new opportunities, such as the scrapping of the Lifetime Allowance.

In the past year about half of advisers increased their average minimum portfolio size by 17% to £117,000, up from £100,000 a year ago. For firms with over £500m invested, the average minimum portfolio size was even higher at £134,000.

The findings back up our own Financial Planning Today Reader Research carried out in the summer which found that Financial Planning Today readers have even higher portfolio sizes, although it should be pointed out we asked about ‘average portfolio size’ rather than ‘average minimum portfolio size.’

Our research found that 29% of readers reported an average client portfolio of at least £500,000 and 68% said clients had at least £250,000 invested. These are not small sums.

There is no doubt that advisers are taking a common sense and very practical business view to concentrate on more profitable clients with higher portfolios. Smaller portfolio clients are likely to shift in future, as a result, to direct platforms or hybrid offerings because there is simply not enough ‘profit’ in their 'business' to pay for advice.

All of this is good for planners grabbing the opportunities but it does not help improve the availability of advice.

It now seems pretty clear that the indirect effect of the Consumer Duty and other recent regulatory and compliance changes has been to make professional and holistic financial advice less available, particularly to clients with less money and means.

The annual Scottish Widows Investor Confidence Barometer, published recently, concluded that regulatory changes were, “forcing advisers to seek larger clients.” All the evidence, including other surveys, suggests that this is indeed the case.

It’s a reminder that a relatively upmarket, bespoke service such as holistic Financial Planning was never likely to be within the reach of those with modest means and an alternative approach is needed.

Serving the millions in the mass market will need new thinking and new models.

• This column is taking a short break over Christmas and New Year and will be back in mid-January. Many thanks for all your comments and feedback on this column over the past year, they have all been appreciated. Have a great Christmas and if you get fed up with the turkey sandwiches and mince pies you can always drop in and catch up on the news on Financial Planning Today at any time and why not enjoy our latest issue of Financial Planning Today magazine while you are here: The latest issue of our Financial Planning Today magazine can be viewed here: https://bit.ly/2ZdVXWz. 

Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin >Top Tip: Follow Financial Planning Today on Twitter / X @_FPToday for breaking news and key updates