Total earnings by financial advisers increased by 22 per cent to £4.5 billion in 2017, FCA data shows.
Figures in the regulator’s latest data bulletin show aggregate pre-tax profits rose 23 per cent to £698m, which the regulator says was driven by growth in headline revenue.
Small firms have the highest pre-tax profit margin, at 43 per cent of total revenue.
The average pre-tax profit for a one-adviser firm was £80,349, with two to five adviser firms seeing average profits of £192,328. Firms with between six and 50 advisers made £358,454 last year.
Revenue firms receive from initial charges rose 24 per cent in 2017. Of this, the share accounted for by restricted services was 40 per cent, up from 39 per cent in 2016.
The data shows 89 per cent of firms have between one and five advisers. Firms employing more than 50 adviser staff account for 44 per cent of all advisers, but less than one per cent of firms. There are around 8,000 appointed representatives working at advice firms as at 31 December 2017.
The most recent breakdown of types of advice provided show 2 per cent of firms provide a mixture of independent and restricted advice, while 11 per cent have just restricted offerings, and 87 per cent are independent.
The number of restricted advisers is slightly lower than that recorded in February in a Freedom of Information request filed by Money Marketing columnist, Paul Lewis. At that time, 13 per cent were restricted at 82 per cent were independent.