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Analyst finds UK IFAs in &#39enviously&#39 healthy financial position

More than half of UK IFA firms are in a strong financial position with healthy balance sheets and low debt levels, according to research by analyst Plimsoll.

The new study examining the finances of the 1,000 biggest IFAs, covering areas such as profit, debt, turnover and margins, rates 512 firms as “strong” with average margins of 12.7 per cent which it says puts them in an envious position.

Plimsoll places firms in one of five categories, strong, good, mediocre, caution or danger, based on their financial performance.

But the research warns IFAs against complacency, saying 199 or one in five are in the danger category and risk being forced out of the market.

It says those in danger have been in decline for years due to a combination of increasing debts and decreasing margins and are approaching the stage where debts are restricting the ability of management to make good business decisions.

Senior analyst David Pattison says: “I believe that the IFA industry has too many companies chasing too little market. These companies rated as danger have been in decline for years. But it is not all doom and gloom out there, with 512 companies being given a strong rating. These companies are worthy of envy.”

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What employers should expect over the next five years

A major feature of our articles is looking into the Jelf Employee Benefits crystal ball to predict changes and trends that may influence the short and medium term shape of UK employee benefits.  By flagging such changes early we aim to provide our followers with the tools to make sensible and informed decisions on their benefits offerings.

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