One-in-three advice firms planning expansion

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Almost one-in-three advice businesses are planning to recruit more advisers over the next twelve months, according to a survey by the FCA.

The survey, published in full next month, was revealed in the final report of the Financial Advice Market Review, which emerged yesterday.

The FCA surveyed 233 firms between November and December last year, with just over half of the respondents representing firms with only one or two advisers.

Although advice businesses have criticised FAMR itself, the FCA found that 30 per cent planned to recruit more advisers this year.

At the same time, the regulator also found that 45 per cent of firms would rarely advise customers on retirement income options if they have less than £30,000 to invest.

And just 18 per cent of firms said they would advise savers with less than £30,000 to invest.

Echoing this, the FCA also found just 27 per cent of customers advised by medium or large advisory firms – defined as those with ten or more advisers – on retirement income had pension wealth of less than £300,000.

By contrast, those with less than £300,000 represented only 19 per cent of those advised by very small firms, with only one or two advisers.

The FCA attributes the difference to firms with high numbers of advisers benefiting from economies of scale.