JP Morgan predicts the number of financial advisers will fall by a further 20 per cent to under 20,000 because of the RDR.
Speaking at the Lansons Communications Future of Financial Services conference in London last week, JPM head of UK retail Jasper Berens said the number of advisers has already fallen by 4,000 since the RDR was first announced, with thousands more set to drop out in the coming years.
He said: “We believe 15 per cent of advisers have disappeared over the last five or six years since the RDR was declared, down from 27,000 to 23,000. Another 20 per cent of advisers will probably drop out of the market.
“But if you think there are 150,000 practising solicitors, 140,000 accountants and only about 20,000 advisers, there is clearly still a strong demand.
“If any university leaver is thinking about a career then, clearly, financial advice is one they should be getting into.
“They are better qualified, more sophisticated, advice is in good shape and their interests are more in line with clients. It is one of the great success stories of the RDR.”
Informed Choice managing director Martin Bamford says a 20 per cent reduction would not be a surprise as the RDR was only the first hurdle for advisers to survive.
However, he adds: “One risk is that the cost of regulation will not fall in line with reduced adviser numbers, resulting in an excessive cost burden for those of us who choose to remain in business.”