Adviser profits leapt at both an individual and firm level in the first year of the RDR, research from Apfa reveals.
But the research also found that non-advised sales accounted for a greater share of the market last year than in 2012.
The trade body has complied data on firm and adviser numbers, profit figures, and the number and segmentation of clients based on FCA figures and figures from Apfa’s own research with NMG Consulting.
It shows the average revenue per firm increased by 3 per cent, from £738,025 in 2012 to £759,651 in 2013.
The average revenue per adviser rose by 6 per cent, from £158,429 in 2012 to £167,863 in 2013.
Meanwhile the consolidated pre-tax profits for adviser firms increased by 14 per cent, from £835m in 2012 to £953m in 2013.
The figures are for ordinary activities before tax and relate to business generated by firms with an FCA primary category ‘financial adviser’. However, Apfa notes the figures are shown before dividends and therefore may not reflect the full costs of running a firm.
The average pre-tax profit per advice firm was £189,281 in 2013, up 16 per cent from £163,027 in 2012.
The average pre-tax profit per adviser rose by 20 per cent, meanwhile, from £34,996 in 2012 to £41,826 in 2013.
The report also reveals the split between advisers’ income sources.
It shows that 29 per cent of advisers’ income comes from pre-RDR investment business, 27 per cent comes from post-RDR initial fees, and 23 per cent comes from post-RDR ongoing service fees. About 15 per cent comes from commission on non-investment business and the remaining 6 per cent from other sources.
The survey also shows that 87 per cent of advisers’ overall income comes from independent advice, while 9 per cent comes from restricted advice and 4 per cent comes from ‘focused advice’, which the trade body likens to simplified advice.
The research reveals a significant increase in the proportion of non-advised sales.
It shows that among all financial services firms that sell retail products, the split between non-advised and advised sales has risen from 41 per cent versus 59 per cent in 2011/12, to 50:50 in 2012/13.
Among the financial advisers, the proportion of non-advised sales has risen from 28 per cent in 2011/12 to 33 per cent in 2012/13. The proportion of advised sales has fallen from 72 per cent to 67 per cent.
Apfa director general Chris Hannant says the report provides a “snapshot” of the market during the first year of the RDR.
He says: “The rise in non-advised sales demonstrates the need for a level playing field , regulation wise, between advised and non-advised sales.
“The advice industry has performed well, though, with retained profits up on 2012.”