A surge in turnover at advice firms in the wake of the pension freedoms could spark a recruitment drive this year, research from Aviva suggests.
The provider’s ‘Adviser Barometer’ survey, published today, shows 26 per cent of adviser firms have an average turnover of more than £1m, up from 16 per cent in May 2015.
Similarly, the proportion of firms with turnover of less than £250,000 has dropped to 38 per cent, from 56 per cent in May.
The figures appear to have been driven by the pension freedoms, with 72 per cent of respondents saying the reforms had benefited their business.
The findings are based on research carried out with 1,865 advisers and paraplanners in November.
Aviva has also backed calls for a pooled compensation fund, paid for by advisers, to be introduced to limit liabilities and boost access to advice.
The idea is one of four reform proposals included in the Financial Advice Market Review to reduce advisers’ liabilities.
The other three are introducing a longstop, bringing in varied limitation periods linked to the terms of products, and enhancing professional indemnity insurance so it includes sufficient cover to meet claims relating to long-term advice.
Aviva adviser platform chief executive Tim Orton says: “Our findings show professional indemnity costs are a constant worry. It would be wrong if this limits advice provision and customers go unserved.
“Consumer protection is critical, however, it should be balanced to ensure advice is available to more people. Financial redress should be structured in such a way that providers and advisers are encouraged to support more customers. In doing so, we can reduce the poor customer outcomes that could ensue if people make complex financial decisions alone.
“Of the options presented in the Financial Advice Market Review, we would support further exploration of the pooled compensation fund, which could be funded by providers of advice.
“By limiting the liabilities and self-funding rather than insuring the fund this could reduce the costs to advisers and in turn help ensure more consumers are served with advice at a price that is affordable to them.”