The number of IFAs in the UK could be anything between 27,000 and 37,000.
According to latest figures given to the LIA by the FSA's processing department and obtained by Money Marketing, the number of IFAs has increased by 29 per cent over the past year to 36,365 from 28,230 while the number of direct salespeople has fallen to 46,593 from 63,000.
If these numbers are accurate, IFAs now make up 44 per cent of the total 82,958 advisers in the UK while direct salesforces represent the other 56 per cent.
But all is not as clear as it might seem, with the FSA's press office denying that the number of IFAs has risen so much. FSA spokeswoman Jackie Blyth says: “There are more likely to be 26,000 IFAs. The higher figure may include recognised professional bodies such as solicitors.”
Finding an accurate figure from the FSA is not easy due to different figures coming from different departments.
Another source, the Matrix directory of IFAs, which has one of the most comprehensive IFA databases in the UK, claims there are around 35,000 RIs.
There is also disparity between the figures put forward by the various IFA trade bodies. Aifa says there are about 24,000 IFAs, of which around 16,500 are Aifa members, up from 13,267 last year.
But LIA John Ellis believes the figure of 36,365 IFAs is accurate. He suggests the increased figure could be due to the winding up of the Insurance Brokers' Registration Council which had around 15,000 IFAs on its books, of whom half were advising on life and pensions. Former IBRC members now have to register with the PIA.
Scottish Equitable IFA training manager Peter Williams says: “While I am surprised the increase in IFAs is so dramatic, I am not surprised there has been a jump. I estimate there were about 300,000 direct salespeople three years ago, which declined to about 60,000 one-and-a-half years ago with the end of about four or five direct salesforces.”
Williams says the IFA networks have been big winners in the growth of the sector. Misys, the biggest IFA network with 4,500 registered individuals, says almost 60 per cent of its members come from a direct-sales background.
Countrywide, part of Misys, acquired Royal & Sun Alliance's 450-strong direct salesforce at the start of 2000 and, over the last year alone, Misys as a whole has taken 1,000 people from direct sales.
DBS says it has 2,923 members compared with 2,807 last year, with 98 per cent of the increase due to people moving from direct salesforces, including Pru, Axa Sun Life, Royal London and Britannic.
DBS recruitment manager Andy Murphy says: “I expect our membership to continue to increase as life offices continue to abandon or reduce their direct salesforces.”
Berkeley Independent network has 465 registered individuals, with 60 per cent of them coming from a direct-sales background. It aims to double its membership within 18 months mainly by targeting direct salespeople.
To date, Berkeley has recruited 35 new IFAs from direct salesforces and its processing a further 70 applications. These are mai-nly from the Sun Life Financial of Canada, Prudential and Britannic salesforces.
A relatively new network, Positive Solutions, has recruited 208 new members in the past year, with 187 coming from a tied background. Of these, 106 came from Colonial, 53 from Allied Dunbar and 26 from a range of other sales teams.
The IFA sector has clearly grown, perhaps more than the FSA likes to admit as it pushes ahead with its plans to change polarisation. With direct salesforces continuing to wane, the IFA sector looks set to flourish for some time to come.