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United Kingdom (UK) Financial Advisors 2023- Product Image
United Kingdom (UK) Financial Advisors 2023- Product Image
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United Kingdom (UK) Financial Advisors 2023

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    Report

  • 38 Pages
  • March 2024
  • Region: United Kingdom
  • GlobalData
  • ID: 5786354
Description Jump to:
This report discusses the key trends shaping the UK's financial and investment advice space over the course of 2023 and beyond. It covers the size and growth of the financial advice market (including profitability), merger and acquisition activity, as well as the key threats and opportunities cited by advisors. The report also discusses how market trends such ESG, artificial intelligence, and regulation will shape the sector in the future.

The UK’s financial advice market is undergoing a period of change and evolution. The composition of the market is changing amid an ongoing wave of consolidation thanks to ready sellers and willing buyers. Single advisor firms still dominate the market, but the average number of advisors per firm keeps ticking up, indicating a shift towards medium-sized and large outfits. Financial advisors play an important role in serving retired individuals and those approaching retirement. However, the enduring challenge lies in closing the advice gap, as less than 10% of consumers have accessed regulated financial advice.

Scope

  • The number of financial advice firms fell by 1.1% in 2022, with 56 fewer firms in the market compared to 2021. Conversely, the number of financial advisors increased by 1.4%.
  • 2023 saw a record number of acquisitions in the advice sector, with over 102 deals recorded. The key drivers for business sales are retirement and the support of a large business.
  • 24.8% of investors stated that financial advisors were their preferred channel for arranging investments. 33% of these investors were aged over 65.
  • Fewer investors are considering environmental, social, and governance (ESG) factors when investing compared to 2021-22. However, the introduction of new Sustainability Disclosure Requirements should boost confidence in the industry.

Reasons to Buy

  • Understand the latest data on the size and composition of the UK financial advice market
  • Find out about the latest M&A deals in the consolidating financial advice space
  • Learn who uses financial advisors and what their motivations are for doing so
  • Discover the key trends and themes affecting the financial advice industry
  • Understand the current regulatory challenges that financial advisors are facing
  • Learn more about how advisors can prepare for The Great Wealth Transfer
  • Uncover the opportunities offered by ESG investing and the productivity gains of generative AI

Table of Contents

1. Executive Summary
  • 1.1 Market overview
  • 1.2 Key findings
  • 1.3 Critical success factors
2. Market Overview: Financial Advice Firms
  • 2.1 The number of advice firms fell by 1.1% in 2022
  • 2.2 Consolidation is changing the structure of the market
  • 2.3 Average revenues and profits grew in 2022
3. Financial Advisors and their Customers
  • 3.1 IFAs are the go-to channel for investments
  • 3.2 Financial advice is only reaching a small proportion of consumers
4. Key Trends in the UK Financial Advice Market
  • 4.1 A lackluster economy, high inflation, and weak financial markets make for a challenging backdrop
  • 4.2 Regulation: Consumer Duty has dominated the agenda, but attention now turns to AGBR
  • 4.3 New regulations should boost confidence in ESG investing
  • 4.4 Growth in the over-65 population and intergenerational wealth transfer are key opportunities for financial advisors
  • 4.5 Generative AI introduces a new way of working
5. Appendix
  • 5.1 Abbreviations, acronyms, and initialisms
  • 5.2 Definitions
  • 5.3 Methodology
  • 5.4 Secondary sources
  • 5.5 Further reading
  • About the Publisher
  • Contact the Publisher
List of Tables
  • Table 1: Selected financial advisor acquisitions, 2023
  • Table 2: Selected financial advisor acquisitions, 2024
  • Table 3: Examples of financial advice firms backed by private equity and other investment houses
  • Table 4: Average revenues of financial advice firms, 2018-22
  • Table 5: Average pre-tax profit of financial advice firms, 2018-22
List of Figures
  • Figure 1: The number of financial advice firms continued to decline in 2022
  • Figure 2: Small financial advice practices dominate the market, but their numbers are slowly coming down
  • Figure 3: Restricted and dual-status firms represent just over 10% of the market
  • Figure 4: The number of ongoing clients at financial advice firms jumped in 2022
  • Figure 5: Professional indemnity insurance premiums as a percentage of regulated revenue have continued to increase
  • Figure 6: IFAs are the preferred channel for arranging investments
  • Figure 7: The convenience of IFAs is considered a key draw
  • Figure 8: A third of respondents who favor IFAs for arranging investments are aged 65 or over
  • Figure 9: Traditional banks and building societies remain the first port of call for those opening new investments
  • Figure 10: Older consumers place more value on a trusted brand compared to younger generations
  • Figure 11: Inflation started to moderate in 2023
  • Figure 12: The FTSE 100 has lagged international peers over the last three years
  • Figure 13: The number of adults with a high risk tolerance and significant cash holdings is increasing
  • Figure 14: The over-65 population is projected to increase year on year through 2038
  • Figure 15: The majority of pension pots are withdrawn without advice or guidance
  • Figure 16: AI job postings in the UK financial services industry have risen notably since 2020

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Perspective Financial Group
  • Fairstone
  • Wren Sterling
  • and Skerritts
  • Lync Wealth Management
  • Sheafmoor Money Management
  • North Financial Management
  • Liberate Wealth
  • Soderberg & Partners
  • Canaccord Genuity

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About the Financial Advisor Market

Financial Advisors are professionals who provide advice and guidance to individuals and organizations on financial matters. They help clients make informed decisions about their investments, retirement planning, estate planning, and other financial goals. Financial Advisors typically work with clients to develop a comprehensive financial plan that takes into account the client's current financial situation, future goals, and risk tolerance. They also provide advice on tax planning, insurance, and other financial products. Financial Advisors are an important part of the Wealth Management industry. Wealth Management is a holistic approach to managing a client's financial assets, including investments, retirement planning, estate planning, and other financial goals. Wealth Managers provide advice and guidance to clients on how to best manage their financial assets to achieve their goals. Some of the companies in the Financial Advisor market include Edward Jones, Merrill Lynch, UBS, Morgan Stanley, and Charles Schwab. Show Less Read more

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