Regulation  

Small IFAs squeezed as big firms report recruitment surge

The number of one-man IFA bands left in the sector is set to shrink in 2014 as a number of larger advisory firms have recently reported a surge in job applications from advisers, it is claimed.

Steve Hagues, managing director of Retiring IFA, a matchmaker for buyers and IFAs wishing to sell their businesses, said changes introduced by the RDR would be felt more acutely among sole traders who will “struggle” to keep their margins sustainable.

Mr Hagues said: “The effects brought about by the RDR will be similar to the impact made by the internet - there is no initial big bang but a gradual long-term effect which will see owner-managed sole traders struggling to sustain profitability in an era where being an independent financial adviser is becoming less viable.”

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His comments come as Sandringham, the recently established national IFA firm, confirmed a spike in applications since the beginning of this year alone.

A spokeswoman for the firm said it had seen “a significant increase in both interest and applications to join Sandringham” compared to the same period last year, echoing figures released by international advisory firm deVere, which said the number of job applications it had received on 6 January had more than doubled compared to the same day last year.

A spokesman for Towry, the national wealth management firm, said it had recruited 39 wealth advisers during 2013 as part of its overall growth strategy.

He added: “Our strong adviser numbers demonstrates how we have been able to take advantage of the post-RDR market opportunities. We are confident in continuing our acquisitions drive during 2014.”

St James’s Place and Brewin Dolphin declined to comment on how many advisers have applied to join the companies in recent weeks. Lighthouse and Ashcourt Rowan did not respond to requests for comment.

BACKGROUND:

Retiring IFA released a 22-page report in March last year predicting that sole traders would struggle to stay in business due to economic stagnation and red tape.