The third edition of The Heath Report is due in May. There have been two THRs so far. THR1 was issued in September 2014. It was a hastily constructed document that looked at the availability of advice post-RDR. Although it was well received, it suffered from a narrow survey base.
THR2 was issued in March 2015. It was created from wider survey research driven by Action Consulting, desktop research from regularly published documents and other material shared with us.
It found that 10 million clients had left the sector. This was due to it losing 6,000 mostly transactional advisers, with surviving ones dropping average client/adviser ratios from 405 to 195.
THR2 was sent all over the world. Even the UN has copies of it. It had a significant voice in the RDR debate in Canada and South Africa. Here, it became a major discussion document at the Treasury select committee.
The market has developed further in the two years since, so THR3 will re-run its surveys on adviser/client ratios and business models to see what changes have occurred.
It will also have a new segment looking at the firms’ potential longevity and succession plans.
The sector has lost its traditional “feeder” channels. If it is to maintain or expand its capacity it needs to know how long existing advisers are likely to be in play and who might succeed them.
With the average age of advisers slowly increasing, we need more detail to plan otherwise we will sleepwalk to an uncertain future.
We will start THR3 this week, surveying both members and non-members on current running costs and attitudes to succession.
Garry Heath is director general of Libertatem