Seven in 10 (70 per cent) of financial planning firms have a positive outlook for growth over the next 12 months, research by Saltus has revealed.

The data released from the inaugural Financial Planning Growth Index, launched by Saltus Partnership Programme and L.E.K. Consulting, found that 47 per cent of 200 senior leaders at financial planning firms are confident and 23 per cent are very confident about growth their revenues.

Saltus also found that 84 per cent expect assets under management (AuM) to increase, while 16 per cent expect no growth at all.

However, this optimism varied among different sized firms. Almost half (48 per cent) of larger firms, with AuM above £300m, expect growth by at least 10 per cent, while 11 per cent expect growth of at least 20 per cent.

Mid-sized firms still expect growth, but 78 per cent expect this to be up to 10 per cent year-on-year. A fifth (20 per cent) expect growth above 10 per cent.

Saltus said that smaller firms, those with AuM of up to £50m, are the most cautious, with 44 per cent expecting growth to be no more than 5 per cent. A quarter (25 per cent) of smaller firms expect the next 12 months to be flat or to see a decrease in AuM.

When looking at where firms expect AuM growth to come from, two fifths expect organic growth to be the main driver.

This was followed by client referrals (32 per cent), improved investment performance (26 per cent), technology and automation (15 per cent), partnerships (10 per cent) and digital marketing or social media (6 per cent).

Saltus Partnership Programme head of the relationship team, Nick Heath, said: "To deliver growth, firms must be adaptable in their approach and focus on streamlining operations, continuing to attract and develop talent and embed innovation to drive the best possible outcomes for clients.

"The role of technology in enabling firms of all sizes to meet these challenges head on and underpin their growth ambitions remains paramount. Innovation is no longer a luxury available exclusively to the largest firms in the market, and the Saltus Partnership Programme is designed to enable firm leaders to support across the piece including financing, access to tech and a range of operational services that will enable growth and continue doing what they excel at, looking after their clients."

L.E.K. Consulting partner, Bronswe Chong, added: "The outlook for the UK’s financial planning sector is promising. It is clear the way in which firms expect to grow varies, with larger businesses leveraging acquisitions to capitalise on their scale and resources.

"But driving organic performance remains the key growth driver for firms of all sizes and reiterates the importance of a relentless focus on clients, delivering exceptional service and performance, in delivering growth."

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