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FSA: Adviser numbers fell 12% in RDR build-up

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The number of retail investment advisers working in the UK plummeted almost 12 per cent in the build-up to the RDR deadline, FSA research reveals.

According to the regulator, there were 35,899 retail investment advisers in Summer 2012 – a fall of 11.5 per cent on the previous year.

IFAs were the largest group, representing 58 per cent of all RIAs, followed by advisers in banks or building societies at 19 per cent.

Some 89 per cent of the 1,436 advisers surveyed said they are definitely or likely to remain an RIA, while 6 per cent are planning to leave the industry.

The remaining 5 per cent will either retire as planned, have not yet decided what they will do or are unsure of their prospects.

The FSA says it will publish a full report detailing the findings of the survey shortly.

This follows separate research published by the FSA in November which suggested around 12 per cent of IFAs are likely to switch to offering restricted advice post-RDR.

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There are 14 comments at the moment, we would love to hear your opinion too.

  1. And of these how many became Mortgage Advisers, or just reverted to selling life cover and/or general insurance only?

  2. That figure of 35,899 covers the entire lot right? anyone who could in theory arrange an ISA in 2012. So by those numbers 58% being IFAs, that’s 20,821 in summer 2012 which is before the RDR deadline and presumably is based on FSA fee tariffs for last year. We know that quote a few retired or didn’t make it with the exams.

    Roughly 6,821 bank advisers, who are the remaining 8,257? (equivalent to about 40% of IFA numbers in 2012).

    It all rather makes important reading if last years FSCS shared bill was based on 35,899 and now its around 20,000 or have I misunderstood this?

  3. I think we’ll find that the figures look a lot different post RDR. Lloyds removed their RIA’s Q4 last year and i think we’ll find that at least Santander (and possibly a few more) will get rid of their RIA’s by the time the FSA look into it again.

  4. Based on Dominic,s calculations and theroy ? the uplift in levies and fee’s are going to kill the one’s that are left ? If we also assume a lot more will go by the end of this year looks like the FSA and FSCS will be bankrupt by the end of the year as well !!

    Bravo Hector !! and bravo to RDR !!!

    “What a waste” (in the words of Ian Dury) I could have been a poet and wouldnt need to worry

  5. Keep these stats to hand and look again at the beginning of 2015 and then decide if RDR was good for the industry or not? Maybe, as we’re running into the General Election one of the 3 Muppet leaders might start asking question why someone who over-saw the decimation of an industry was knighted in the honours system. I wouldn’t hold my breath on that one, but seriously which other industry is being systematically destroyed like this one and no one could give a monkey’s?

  6. RegulatorSaurusRex 14th February 2013 at 4:42 pm

    Only 35,899 more fish in the barrel to be shot.

  7. Another load of ifa’s will throw in the towel when the commercial reality hits for those with none HNW

  8. On the subject of Hector’s knighthood: My MP told me that he was knighted because of his, get this, integrity and loyalty. I was dismayed. What planet are MP’s on?

  9. @Dominic.
    How many of the 20000 will be able to afford the bill?
    Fsa will close them down as “not fit and proper” when they cannot pay up, just to add insult to injury.

  10. Dominic, I think you are right re the percentages and the proportion increase for the remainder. It could be a very bitter pill if a few Stockbrokers, spread betting or regular investment companies have problems and the cost of compensation remains with the IFA’s led authorised

  11. The commercial reality will not hit the FSA & fSCS until they realise there are not enough IFA’s left to pick up their ever increasing regulatory burdon and have to start making cuts themselves or more likely put up the fees for the remaining…… causing more to leave and the vicious circle continues down because there is no longer the critical mass of IFA’s to pick up the Tab

  12. Anon @ 10.59
    The FSA never consider commercial realities. It is an alien concept to them.
    They do not operate in a world whereby they need to budget properly. They are unaccountable and can do as they please.
    The rest of us know that if our outgoings start to match our income it is time to close up shop.
    Simple economics.
    My children can understand that.
    They know that if they eat all their sweets, they will have none left. Simples.

  13. Re anon 11.44.
    I understand the FSA do not understand The commercial realitys, what I mean is that they will only reallise when there is a massive drop in fees to pay them to be useless and the FSA are forced to reduce their costs via golden plated redundancy payments

  14. Hector Sants told the TSC in March 2011 that the FSA’s estimate of the attrition rate amongst intermediaries as a result of the RDR was between 8 and 13%. With the FSA’s Red Button Day only six weeks behind us, we’re already pretty near to the top of that range. It will be interesting to see how far beyond 13% the numbers have gone by the end of 2013, not just because of the decline in profits as a result of the new charging regime but because of all the other burdens that the FSA appears to be intent on imposing relentlessly on the intermediary sector. Higher levies, higher contributions to the FSCS, higher PII premiums, no meaningful action to curb the often fraudulent activities of CMC’s and an even more tortuous, time-consuming and largely pointless obstacle course every six months in the form of the FSA’s Room 101 RMA Returns.

    Just what does the FSA do with all this data? Many consider it just to go into a black hole, thereby serving no useful function whatsoever. Was any Cost:Benefit Analysis carried out before the requirement fo intermediaries to submit RMAR returns was introduced? Will any attempt ever be made to establish any sort of Benefits:Cost Ratio of these returns? Shouldn’t the FSA be required to justify to a body other than itself the potential value of these returns? What, if any, useful purpose do they serve?

    Why, of why, has the government failed to create an Independent Regulatory Oversight Committee to curb the unaccountable excesses of this unelected, unaccountable and unbridled monster. A good start might be to make some attempt to hold the FSA to the requirements of the Statutory Code oif Practice For Regulators and to punish it if it continues to ignore it. What hope of that we wonder?

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