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Investment advice firm de-authorisations up 215% in April

More than 40 regulated investment advice firms cancelled their Financial Conduct Authority authorisation in April, up from 14 firms in March.

The monthly Matrix Solutions observatory report, compiled from the FCA register, shows there were 23,582 firms with investment permissions in April. This is down from 23,538 firms the previous month.

The number of registered individuals with investment permissions follows a similar pattern with 187 dropping out in April compared to just 86 in March.

From December to April, the number of authorised investment firms has decreased by 385, from 23,923 to 23,538.

In the same period the number of registered individuals decreased by 3,994, from 133,414 to 129,420.

Matrix Solutions chief executive Ian Beaumont says: “It will be interesting to monitor the situation closely in order to determine whether we are likely to see a significant number of advisers leaving the industry.”



Highclere Financial Services partner Alan Lakey says: “The true figures for firms leaving the industry because of the RDR have yet to come through as many have tried to keep going but business is down on last year and there will be a number of firms that decide it is not worth it land leave in the coming months.”

FCA-regulated firm numbers


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There are 15 comments at the moment, we would love to hear your opinion too.

  1. No surprises here.Well done to all members of the FSA at the meeting when they decided to proceed with RDR as to pull out would mean “losing face”!

  2. Is the FCA waiting until at some stage there is a small piece of positive information and then they’ll sya, “See, the RDR is working”?

  3. Sensationalist headline. Not really what one expects from MM. (Have you recruited someone from one of the Red Tops?)
    385 firms lost since December. That’s a 1.6% drop. Statistically insignificant.

  4. Al Ways Wright 7th May 2013 at 2:57 pm

    I thought the whole purpose of RDR was to weed out advisers and firms who could not make money in a transparent fee charging environment? It seems to be succeeeding in this. Well done FSA / FCA.

  5. Soren Lorenson 7th May 2013 at 3:04 pm

    Imagine 4,000 jobs being lost in any other industry as a result of stupid regulation.

    You would at least expect it to make the 10 O’Clock news.

    It would surely be debated at PMQ’s.

    Why is Financial Services so different.

  6. Is Lakey correct when he says “business is down”? Maybe it is for Highclere, but many others seem to be doing rather well. Including St James Place!!

  7. @ Harry

    Your comment reminds me of the starfish on the beach story…

    A man walking along the beach sees a boy continuously stooping, picking something up and throwing it into the water.

    As he gets nearer he can see that this part of the beach is covered in tens of thousands of starfish and the boy is picking them up and throwing them in the water.

    ‘What are you doing?’ asks the man.

    ‘The starfish are stranded and will dry out and die without water so I’m throwing them in the sea’ says the boy.

    ‘But there are so many you can’t possible make a difference,’ exclaimed the man.

    The boy paused and thought for a moment. He picked up another starfish and threw it in the sea, turned to the man and said…

    ‘Well, I made a difference to that one’

    People also tend to become insignificant when reduced to statistics.

  8. Well said Grey Area
    We need to remember these statistics represent people, none of whom are insignificant.

  9. Thanks for the lecture guys. I must admit that perhaps I didn’t put the point particularly sensitively. Of course it is a hell of a thing individually, but then the statistics don’t state that they are out of financial services. I directly know of several who have lost their investment authorisations (which they weren’t particularly successful at anyway) and have become life assurance and protection specialists. Some have become paraplanners and some introducers and administrators. What many may have in common is that their business plan couldn’t hack it with open and explicit disclosure (AKA fees).

    Then of course there are those who took the opportunity to retire. (Never forget the geriatric demographics of our industry).

    Feeling sorry for these people also has to be tempered with the fact that they had over 6 years to get their act together and manifestly failed to do so. It is difficult in these cases to overflow with sympathy.

    So before you rent your garments and anoint yourselves with sack cloth and ashes, just be sure there is actually a corpse.

  10. I actually agree with you Harry. There will be plenty of statistics over the next few months but the reality is that the full effects of the RDR will take time to come through and there is a need to look at the longer term results. In the meantime there will be many column inches written about the effects of the RDR which I will simply ignore until the dust has settled. Much damage is as a result of the recession and the collapse of the banks.

  11. RegulatorSaurusRex 8th May 2013 at 9:30 am

    As one regulator said on PIMS:

    “We will be worried about the number of firms when it gets down to six”

  12. When advisers do not give a hoot what happens to each other, how can they complain when the regulator treats all of us like crap.
    It is attitudes like harry’s which make me ashamed to say I am an adviser. It simply gives the impression of a dog eat dog mentality.

  13. Julian Stevens 8th May 2013 at 6:39 pm

    Has anyone thought to ask just why so many advisers are leaving the industry? I don’t believe the prime reasons to be difficulties with adopting Adviser Charging and now that Red Button Day has passed, it can’t be the qualifications hurdle either. It’s all the other red tape, bureaucracy and general all round grief that the regulator continues to rain down upon us.

    I spoke today to a colleague who’s just about coping with the requirements of the FSA’s new world order but even he’s getting so hacked off with it all that he’s really wondering if it’s worth continuing.

    If you overload and then beat even the best horse long enough and hard enough, sooner or later he’ll jump over the fence and run away to a better life elsewhere.

    But the FSA, in its high-minded arrogance and blinkered vision of how it thinks the world ought to be simply refused to see this and the FCA has yet to address the problem. It’s going to get worse before it gets better, assuming of course that it ever does.

  14. Getting one’s level 4 wasn’t exactly difficult our rocket science, so those who wanted to stay could have found, and though I have been accused of an RDR naysayer, like Harry and Sam I don’t feel sorry for anyone whom chose not to do their level 4 in time. They had time. We did loose good advisers though near to retirement who choose to go early and will lose more if there is a plush for level 6 (which I will oppose whilst working towards by CHOICE not compulsion). The sad thing is that so many obtained their level 4 only took have their legs chopped off by their employers withdrawal from the advice market or decision to go restricted when I think it unnecessary to do so.

  15. @ phil castle

    Perhpas you could try level 4 English. It would be more of a challenge and closer to your roekit siense…

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