The consultancy’s latest research shows 470 of the 2,900 IFA directors will be over retirement age next year, which it believes will trigger a wave of retirements while “driving a number of firms to recon- sider their independence”.
It estimates that around 5,000 jobs could be under threat in the IFA sector as businesses come under pressure to reduce costs in line with sales due to the credit crisis.
The firm highlights 161 heavily indebted IFAs which it claims are now paying the penalty comparing their “high-risk strategy” with the 834 companies running their businesses debt-free, many with cash surpluses.
Senior analyst David Pattison says: “2009 will be a very exciting year for the industry, it will be a time to choose your enemy wisely. Going on the offensive may well be the best defence. Key to this is the successful targeting of your weakened, low-margin and heavily indebted competitors, their failure will be vital to your own company’s success.”
CBK Colchester principal Peter Chadborn says: “Almost every firm I speak to is having difficulty in most areas and times like this are testing IFAs’ business models like never before.”