UK Loses 435 Financial Adviser Firms but Adviser Numbers Remain Steady

Data released by the Financial Conduct Authority (FCA) has show that the financial advice sector has lost 435 firms since 2022 but the number of registered financial advisers was steady at 32,144 down just 38.

Capacity is still there and there is room for more financial advisers given the advice gap but the stress, comlexity, compliance burden and professional indemnity insurance costs hat put pressure on firms to give up direct authorisation and look for a new home.

Mergers, acquisitions and netweks are key.  There are a number of private equity backed consolidators that are buying up both small and big firms in addition to some smaller firms giving up and moving under the umbrella of a network so reduce individial compliance and insurance burdens.

Comment

It is not easy running an IFA business and the costs for professional insurance are astronomical.  For this website (FinancialAdvice.net/Roberts Clark), insurance alone costs around the salary of two full time employees when there are just two qualified and authorised financial advisers plus a small administration team.

Pressure is all.  The FCA wants more fairness with Consumer Dutiies and other regulatory principles and it appears that the more pressure applied, the target is to cut the number of firms down to make it easier to regulate.  We agree with comsumer protection and initiatives for better consumer outcomes but we disagree with reducing choice and creating bigger firms.

There are many bigger firms that charge too much, that do not disclose fees correct;y and offer poor value for ongoing client servicing despite charging higher fees.

We continue to be directly regulated and will continue to develp velue for money services and an ongoing advice service ‘second to none’ but at lower costs when compared to other larger adviser 1% pa of wealth charge models.

Long live the small IFA.