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Adviser numbers grow despite concerns from RDR

Adviser numbers grow despite concerns from RDR

Fears about the financial advice sector withering away post-retail distribution review (RDR) appear to be confounded by figures published by Apfa.

The trade body has published its 23-page annual report, The Financial Adviser Market: In Numbers, which showed that between December 2013 and December 2014 the number of advice firms registered with the FCA increased by almost 1 per cent - from 14,387 to 14,550.

The number of advising staff has also gone up, from 22,168 in 2013 to 23,640 in 2014.

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There had been concerns RDR would shrink the sector and create an “advice gap” with more clients than advisers.

Chris Hannant, director general of Apfa, said: “Two years after the RDR was implemented, the year to 2014 saw an increase in the number of advisers but it is still lower than before RDR.

“The data suggests a stable market despite the challenging volume of regulatory change.

“Pension reform highlights the need for advice, with the government and FCA making financial advice a key protection for consumers making decisions about guaranteed pension rights.

“The obstacles to consumers accessing affordable advice remain such as the increasing cost of regulation.”

But despite the growth of the adviser sector, Apfa has found that an increasing proportion of product sales are non-advised.

Non-advised sales now accounts for 67 per cent of the market compared to 50 per cent in 2012/13 and 40 per cent in 2011/12.

The split between advice firms which are directly authorised and appointed representatives has once again remained largely unchanged at 36 per cent and 64 per cent respectively.

Once again, the increase in fee based income with retail investment products has continued, increasing by 85 per cent to £1.47m.

Adviser view

Daren O’Brien, an adviser with London-based Aurora Financial Solutions, said: “We are seeing a lot more clients so we are needing more advising staff.

“I think IFA businesses have been more focused on generating profitable business since RDR, so they have focused on specific areas and that has led to a drive for new business.”