Rising compliance requirements and portfolio management demands are limiting the amount of time independent financial advisers (IFA) can spend dealing with clients’ financial affairs, according to analysis from Rathbones.

Its study of 100 IFAs showed that 77 per cent felt compliance requirements were reducing time for financial planning, while 69 per cent said the same about portfolio management tasks.

Nearly half (49 per cent) of IFAs cited a lack of administrative support as a key constraint on their time helping clients.

Rathbones noted that increasing regulatory demands were also impacting advisers’ ability to manage portfolios effectively.

Almost all (98 per cent) IFAs said compliance and documentation requirements already delayed timely portfolio adjustments, with 18 per cent saying the impact was significant.

Advisers forecast this issue to worsen, with 92 per cent expecting the burden to increase over the next three years.

These concerns come as two thirds (66 per cent) of IFAs believe that offering holistic, forward-looking financial planning is what sets their service apart in the current market, especially amid ongoing changes to tax, pension, and inheritance rules.

Rathbones highlighted that the findings also coincide with an increase in client queries on personal finance ahead of the Budget, as well as broader concerns about the limited take up of financial advice.

When asked about the key factors influencing their portfolio decisions, 60 per cent of IFAs cited saving time and 55 per cent highlighted the ability to manage risk.

The breakdown of how IFAs were spending their time was 34 per cent in client meetings and relationship building, followed by financial planning (29 per cent), portfolio management (21 per cent), and other business activities (17 per cent).

“Advisers are under growing pressure from both regulatory requirements and time constraints,” commented Rathbones investment director, Andrea Yung.

“Many are spending more time on portfolio administration than on the strategic planning that advisers say truly adds value for clients.

“With 43 per cent of advisers stating that their clients will place increased value on both financial planning and portfolio management over the next three to five years, the ability to offer the best of both worlds – tailored advice and high-quality investment solutions – is becoming essential.”

The wealth manager is preparing to launch its ‘enhanced’ actively managed portfolio service (MPS), comprising a range of seven risk-rated portfolios.

Each model portfolio is built using three Rathbones-managed funds that form the core of the firm’s risk framework.

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