Non-advised sales accounted for half of all financial products sold in the year to summer 2013, a report from the Association of Professional Financial Advisers has revealed.
The report, which examines the impact of the Retail Distribution Review on the financial advice market, found that the volume of non-advised sales among all firm types had grown to match the volume of advised sales for the first time ever in the period spanning summers 2012 and 2013.
However, non-advised sales among personal investment firms accounted for only a third of transactions in this period, growing from 28 per cent in the 2011-2012 period.
Although the total number of people working at advice firms fell from 23,865 in 2012 to 22,790 in 2013, aggregate revenue increased by 1 per cent, suggesting a greater increase in revenue per adviser.
Chris Hannant, director general of Apfa, said: “This report provides a snapshot of year one of the RDR, and the rise in non-advised sales is one of the standout findings. It demonstrates the need for a level playing field for financial advice.
“The Financial Services Consumer Panel’s report last year flagged that non-advised products were causing confusion around pricing and protection, which ultimately leads to consumer detriment. We need greater clarity from the FCA on this, and await the findings of their thematic review into advised and non-advised sales.
“The advice industry has performed well, though, with retained profits up on 2012. Significantly though, they are still down almost a fifth on the level recorded in 2010 - the year the FCA used as a benchmark to justify the increase in the FSCS threshold.
“Profits across the industry have actually been lower in all of the past three years since then. The regulator needs to look again at affordability for levies, and whether the FSCS threshold level is appropriate.”