Rise in adviser numbers should end RDR obsession

John Kenchington

It’s official. In spite of all the hype about how the RDR was going to obliterate the adviser industry, data has shown the sector has actually grown.

Financial watchdog the FCA last week released the results of the first official industry headcount since the RDR was implemented at the end of 2012.

At end-July there were 32,690 retail investment advisers at work in the UK, compared to 31,132 at end-December – that’s a 5 per cent rise. Within that figure, there are now 6 per cent more financial advisers qualified to work on investments than at the point the RDR was implemented, rising to 21,684.

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The number of qualified discretionary investment managers has risen 24 per cent to 1,784, while the number of stockbrokers is also up 11 per cent. Unsurprisingly, there has been a 4.3 per cent fall in bank and building society investment advisers.

The FCA didn’t provide a detailed breakdown of how many of the financial advisers had attained full ‘IFA’ status compared to ‘restricted’, but this is seen as less of a pivotal distinction now by many advisers.

The regulator puts the rise down to advisers re-entering the market, presumably after taking a hiatus from regulated work late last year as they obtained their Level 4-compliant qualifications. This makes perfect sense.

So, there you have it – the great Judgment Day RDR apocalypse didn’t actually happen.

This isn’t just good news for our industry, it’s good news for the millions of consumers who may be thinking of investing their hard-earned cash and who are in need of properly qualified, independent professionals to guide them.

It also confirms Investment Adviser’s decision to continue to focus on providing leading investment content to advisers, in spite of the hysterical warnings that advisers were going to be wiped out and only discretionary managers would run portfolios in the future.

But the rise in discretionary investment managers to cater for certain client groups is also a major part of the way the industry is changing, and that’s why we recently added hundreds of new readers in that sector to make sure we’re on the desks of the UK’s top retail decision-makers.

Many advisers still feel rightly aggrieved at the FSA’s intervention into their entirely legitimate business affairs, and the regulator’s handling of the transition has been woeful at times.

But the fact is that these figures, at the very least, show the world has kept on spinning on its axis under the RDR. Now we need to get back to the crucial job of showing consumers why they can’t afford to invest without proper intermediaries.

John Kenchington is editor of Investment Adviser