Aifa says industry research shows that the IFA sector had turnover of £6.5bn last year and net profits of 13.5 per cent, which contradicts the FSA’s assertion that the advice market is not sustainable.
Director general Chris Cummings says the economic value added to the UK by financial advice and the financial robustness of the sector has not been fairly reflected in the current debate.
He says Aifa’s new taskforce on the future of advice will commission more detailed research but current statistics suggest that the industry model is far from broken.
Cummings says the IFA sector employs 128,000 people and represents 65 per cent of all retail financial services transactions in the UK, with turnover in 2006 of £6.5bn and net operating profit on capital of 13.5 per cent.
He says FSA chairman Sir Callum McCarthy’s much quoted line in his Gleneagles speech that the top 21 IFA firms had turnover of £650m and net losses of £22m “as of May 2006” was a selective statistic that did not truly reflect the sector.