The past 12 months have been full of opportunity, change and challenge for the advice profession. As we prepare to enter 2018, Money Marketing takes stock of some of the key trends affecting the market.
- Percentage fees fight for survival
Despite many predicting a significant shift away from ad valorem models, two sets of FCA data suggest that charging by a percentage of assets has not taken any substantial hit. Anecdotally advisers are making moves to hourly or fixed models, but comparing data for initial charges from last October with May 2017 suggests the shift is coming slowly.
2. One-man bands buoyant
Expectations that one-man band models were unsustainable have also not materialised. Data from trade body Apfa, which then became Pimfa after merging with the WMA later in the year, shows that the average number of advisers in firms only ticked up very marginally, from 4.53 to 4.55. The total number of staff advising also increased from 23,864 to 24,761, Apfa’s May report said.
3. Drawdown drives forward
In April, the FCA announced it would conduct a wide-ranging review of non-advised drawdown. This hasn’t put people off taking out drawdown, however, or buying it on a non-advised basis, according to October figures from the regulator.
4. Advised platforms advance
Adviser platforms continued to grow assets faster than their non-advised counterparts as consolidation between the likes of Aegon and Cofunds and Standard Life and Elevate bedded in. Here’s Platforum’s UK Adviser Platform Guide cited in the FCA’s platform market study.
5. DB transfers under the spotlight
The growth in defined benefit transfer numbers dominated the headlines, particularly towards the end of the year as advice over the British Steel Pension Scheme underwent an enquiry from MPs.
Here’s what the FCA found when it reviewed the market…