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The independent financial services sector in the UK appears to be healthy which is certainly true in the short term but is going to be under serious threat in the next 3 years.
The IFAA’s Heath Report 3 identified that there would be a drop in adviser numbers, mainly due to the enhanced retirement plans of advisers. This would leave net drop of advisers of 1,650 per annum.
Our estimate of 1,650 has proven to be a serious underestimate. We have already lost a shade under 5,000 advisers in just 18 months. This creates some major issues. We have a decreasing supply of advisers for an increasing client demand. That will increase the cost of employed advisers.
Worse still; the cost of regulation will not drop in line with the drop in adviser numbers. So, the cost of regulation will increase from £1,825 to £2,200 per adviser for 2020 and that doesn't include any additional hikes in FSCS.
So, adviser numbers are diminishing, costs are rising and the regulatory bodies are continuing to control the direction the industry is heading in with little regard to those it purports to regulate, or the consumer.
Regulator policy appears to be anti-adviser and pro unproven ideas like robo-advice. We need to bring regulation back into the world of the practical and away from social engineering.
Which is why we, as a profession, must now unite as one to shape the future of financial services before the FCA can get its act together. In particular, we must remove this nonsense of an “Independent” regulatory regime and demand that it becomes accountable to Parliament, the consumer and to the industry it claims to serve.
Brexit will give us an opportunity to revise regulation in the UK, reform the way Government works, help shape Treasury policy and bring back both real accountability and democracy to regulation.
If events continue to unfold as planned, the IFAA will be ideally placed to extend its influence in Government to bring about a better deal for impartial advisers in the UK.
We can only do that with a properly funded association – Join Today