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FCA reveals 23% further fall in bank adviser numbers

The number of bank and building society advisers continued to plummet in the second half of last year as financial advisers remained flat, the latest FCA figures reveal.

Figures released by the FCA today show the number of financial advisers rose by 1 per cent between 31 July and 10 January, from 21,684 to 21,881. This is likely  to reflect more advisers achieving QCF level four during the year.

But the number of bank and building society advisers fell by 23 per cent over the same period, going from 4,604 to 3,556. This is on top of a fall of 4 per cent between the end of December to the end of July, and represents less than half the 8,658 bank and building society advisers operating as at the end of 2011.

The latest figures, as at 10 January, show the number of discretionary investment managers has stayed flat at 1,787, compared to 1,784 as at the end of July.

Over the same period the number of stockbroking firms has fallen 16 per cent from 2,267 to 1,906.

In total, the number of advisers fell from 32,690 to 31,220 between 31 July and 10 January. 

FCA chief executive Martin Wheatley says: “The biggest concern pre RDR was about adviser numbers, rather than the number of people getting advice. That has now changed.

“Overall adviser numbers are certainly down from six months prior to the RDR – there has been a fall of 11 per cent since summer 2012 – but that is almost entirely accounted for by the decline in banks and building society numbers.

“Numbers in the adviser space are relatively flat. Generally, IFAs would say the RDR has been a net benefit for them.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. RDR has been a disaster for the average middle earner. It has meant that anyone with less than £100,000 to invest has been side lined. If only those in the FSA had listened to people who worked in the industry and not in the nice glass tower with no experience this would not have happened. Individuals are happy to invest or save for a pension but will not pay an upfront fee. With commission the average individual with average earnings was able to save knowing that commission payable was deducted over a period of time from the investment. With a lot of firms if the individual stopped investing the IFA had a clawback not a charge on the investor

  2. Total load of rubbish that RDR has been a disaster for middle income earners, as I have had a steady stream of this type of person looking for advice since RDR and the demise of bank advice. In fact I would go as far to say that clients have been more than willing to agree to fees and sometimes it is the perception of the advisers working within the industry RDR was going to be a big problem.

    RDR is only a problem to the bank adviser due to the fact that they have to sell a product when in some cases a product is not necessarily the right course of action. The fact RDR is a success for the consumer and a total disaster for those businesses that chose to stick their heads in the sand and not change.

    If banks want to sell products they should do so as product providers and not as professional advisers as it is clear that they have vested interests that have seen some of the worst miss-selling.

    Clients are well prepared to pay for accountancy & solicitor advice for even pay for a mechanic to fix their car. It’s only financial advisers who hid their fees anyway within products that seem to have a problem with being upfront with clients over fees. There is nothing stopping an adviser charging a client over time if they wish to, it called a retainer.

    To the person that posted the first comment – I can just imagine what your response would be to a bank staff member who booked a client earning £45,000 per annum with 20K in the bank account in your diary. Answers on a postcard lol.

  3. Agree totally Peter. Well said.

  4. “Total load of rubbish that RDR has been a disaster for middle income earners”

    Obviously Peter you can only speak from your experience the general consensus would tend to differ so total would probably not be the right description.

  5. I can’t say that, over the last few years, I welcomed the proposed RDR changes with unabated excitement – change is always a pain, and after 43 years in the industry, and at an advanced age, having to take new exams was a bummer –

    However, once that was out of the way, and we had started to change tha way we worked, it all fell into place, and to now characterise RDR, and especially the ending of commission, as “a disaster for the middle earner” is just plain silly.

    It has been a disaster for those who became accustomed to massive commissions for flogging, and then churning, Investment Bonds and expensive Personal Pensions, especially after better options became available, and it remains a disater for most of the Life Offices, whose markets have disappeared overnight, and who are now trying, and mostly failing, to re-invent themselves.

    I run a small business, with staff and decent offices, in a small to medium size country town, with a preponderence of middle and low earning clients, and many with decent, but not large, savings and investments, and we can make a decent living advising and managing clients with investment portfolios between around £10,000 and £100,000, as well as whatever other business presents itself. So, if anyone wants to ‘sideline’ any clients with small investments to make, let me know, Ill have them.

    Among other things last week, I dealt with an Annuity purchase of £7,800, charging 1%, and charged £20 to report and advise a member of an Aviva Group PPP on the choice of funds available, and which might fit his risk profile, because he couldn’t get any response from the Scheme Advisers! That’s very poor of course, but not too surprising. Is that profitable for me? Maybe not very, but I enjoyed doing it, and as we all know, small things can lead to bigger things over time.

    As Peter and Mathew suggest, I suspect I’m not alone in finding that the world has not ended post RDR amd that, to the contrary, it’s made client relationships very much simpler in so many ways.

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