A quarter of advice firms enjoyed an annual turnover of more than £1m last year and are looking forward to expanding further this year on the back of the at-retirement reforms.
In a survey of more than 1,200 advisers, Aviva found 26 per cent of firms broke the £1m annual turnover barrier, up from 16 per cent in May 2015.
At the same time, firms with a turnover of less than £250,000 dropped from 56 per cent last May, soon after pensions freedoms came in, to 38 per cent.
According to Tim Orton, chief executive of the Aviva Adviser Platform, this has created an opportunity for the auto-enrolment and retirement market to grow, with 40 per cent of firms saying they are planning to recruit more advisers in 2016, up from 32 per cent last May.
Nearly three in four advisers told Aviva that the pension reforms have had a positive impact on the industry, with two thirds saying they remain the biggest opportunity in the market.
Advisers believe there is more to come, with 67 per cent saying pension freedoms are also their biggest growth opportunity this year.
A third of advisers consider auto-enrolment to be one of the biggest opportunities for them in 2016, up from a fifth last May.
Mr Orton noted that a number of firms have not reviewed their due diligence since pension freedoms were introduced, so suggested they do so, as the changes to potential customer groups and requirements have been “significant”.
Almost a quarter of advisers told Aviva they view the April implementation of the sunset clause as an opportunity to attract orphaned customers.
Jonathan Rowley, director and IFA at Sheffield-based Hamnett Wealth Management, said pension freedoms were a very good opportunity and one that has helped his company grow their turnover.
“Advice firms, like ourselves, that specialise in pension transfers business, clearly have a massive scope for transfer advice. For example, not all firms are authorised to give final salary transfer advice but those that are have seen a demand for their services.
“Everyone talks about pension freedoms, but a £400,000 occupational scheme is a lot if money to access at 55. The alternative is to have a pension of £30,000 a year, take £80,000 from your funds, save on interest payments and pay off your mortgage.
Mr Rowley stated that one-man band IFAs on less than £250,000 are more generic advisers and not willing or qualified to touch final salary transfers.
“We are getting other firms of financial advisers asking us to advise their clients. Larger firms will probably get larger and smaller IFAs will be happy to work collaboratively with medium-size firms.
“Large firms are so expensive for pension transfer advice that SMEs are doing very well indeed.”