Financial advisers have revealed the greatest operational challenge they face to their profitability in 2021 will be having fewer new clients approaching them this year.

Research showed that adapting to greater remote working was identified as the second biggest operational challenge that advisers face over the next 12 months.

An online survey of 70 Personal Finance Society members conducted in November also highlighted the key challenges of increasing regulatory cost and the impact of a hardening PII market.

The society revealed that updating IT processes to cope with the new normal way of working was seen as the greatest issue faced in the year ahead by one in five of the financial advisers polled. Just one in five advisers stated mounting fraud risk as the greatest challenge to the way they will work this year.

“Financial advisers have had to adapt to the new normal created by measures to slow the spread of COVID-19 at lightning speed,” said Personal Finance Society chief executive, Keith Richards.

“The pace of change shows no sign of slowing down in 2021 and will bring new business risks but also many opportunities to continue to rethink old ways of working, drive greater efficiencies and develop new methods of engaging with clients.

“The Personal Finance Society will continue to support members with the sharing of practitioner ‘good practice’ of ways to continue to safely deliver their vital services to the public in the year ahead.”

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