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Analyst predicts over 1,600 job losses next year Seventy staff to be axed as Britannic restructures

The IFA sector faces over 1,600 job losses next year due to soaring salaries and lower profits, predicts industry analysts Plimsoll Portfolio.

It says 1,637 jobs are likely to be cut next year becausethe cost of employing people is increasing at a faster rate than IFAs can afford.

The research on the UK&#39s top 1,000 IFAs found that for the last three years the cost of salaries has gone up by 50 per cent but sales have only grown by 44 per cent.

It revealed that 88 per cent of IFAs are spending more on salaries than three years ago but it claims that only just over half are making a profit and 236 companies are in serious financial distress.

The cost of salaries as a function of sales has inc-reased by 6 per cent and one-fifth of the companies are loss-making, claims Plimsoll.

The situation is expected to worsen with the average salary set to rise by 4.7 per cent to £28,082 from £26,813.

Plimsoll claims a staggering 37 per cent of IFAs in the analysis could not absorbnext year&#39s salary increasesas they cannot afford to paythe rises.

Plimsoll says this evidence is strong enough for it to predict that at least 44 per cent of the industry will need to shed jobs in the next 12 months and the major players in particular will be affected.

Senior analyst David Pattison says: “There is little doubt that managers will use the current economic and market conditions to make decisions that, frankly, they should have made 18 months ago.”

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