Less than a third of advisers focus on £100k+ clients

In spite of bearish rhetoric from across much of the advisory sector that the Retail Distribution Review has pushed advisers up the value chain, new data reveal that less than a third of intermediaries currently focus exclusively on higher net worth clients.

Data from adviser review website reveal that of 903 active member advisers, 46 per cent state that they will deal with any level of wealth, while a further 23 per cent apply a floor of £50,000 of investible assets.

This leaves 31 per cent that set a floor level of £100,000 of investible assets, a level often cited as a key threshold over which clients become viable. Of these, 8 per cent focus only on those with £250,000 to invest - officially ‘high net worth’ individuals - and 1 per cent set the floor at £500,000.

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The data is published a day after Standard Life claimed that the UK requires around 25,000 advisers, based on the assumption that they would be targeting the 3.8m people over the age of 55 that, according to the Office for National Statistics, have over £100,000 to invest.

Standard Life assumed that each adviser can service 150 clients, giving a viable adviser market of 25,333. According to FCA figures, as at December 2012 there were 31,132 individuals with an RDR statement of professional standing, of which 20,453 worked at a pure financial advice firm.

If advisers are actually targeting a wider audience profitably, then it is likely that the viable size of the sector would be considerably higher.

VouchedFor’s data also reveal that of the nearly 3,000 people who have reviewed their adviser on the website, 31 per cent have less than £50,000 in savings and investments.

On average people contacting an IFA through VouchedFor have £160,000 in savings, investments and pensions to potentially transfer or invest, with 16 per cent having more than £500,000.

Adam Price, founder of VouchedFor, said: “This illustrates that there is a broad base of people looking for advice out there, the trick is matching the right person to the right adviser.”

Separately, a poll conducted by YouGov and published by Axa Wealth yesterday (23 July) showed that demand for financial advisers from individuals that have never before sought advice is on the rise.

While 16 per cent of the more than 2,000 respondents said they had sought advice in the past and plan to do so again, encouragingly for the sector a further 19 per cent said they would intend to to do so in the future.