The Financial Conduct Authority (FCA) has warned that as a result the coronavirus pandemic 4,000 firms in the financial sector are at risk of failing.
The FCA’s detailed financial review of the professional finance market since the pandemic began reveals almost a third of firms could fail and therefore cause harm to consumers.
3,414 firms within the retail investment market which includes advisers, self-invested personal pension operators and platforms have suggested themselves (confidentially) that the pandemic will hurt income. The advice sector had one of the highest proportion of firms expecting incomes to fall.
5,159 firms responded to the FCA’s data request and 66% of those expected a drop income.
The impact on income was predicted to be minimal, with 2,973 retail investment firms predicting a reduction of income between 1% and 25%. Just 26 firms predicted a drop of more than 76%.
The FCA’s financial resilience survey was sent to 13,000 firms in June and a further 10,000 firms in August.
The hurt will spread across the world and the forgotten sector of financial services (key workers 'by the way') has basically been forgotten by government support. That said, if firms are successful in online and remote advice services that we offer, there will be limited pressure on many firms.