Despite swathes of consolidation in the advice market it is still viable for advisers who do not want to join a larger firm to go it alone, according to one discretionary fund manager.
Eleanor Williams, partnerships director at Albemarle Street Partners, said while it can be complicated, becoming directly authorised is an attractive route for many.
In June, the firm launched Breakaway Adviser, an initiative to support advisers in making the leap to starting their own businesses.
Williams said some can be pushed to setting up on their own as a result of consolidation and not wanting to be part of a larger firm.
She said: “It is a really difficult, daunting process and we want to help people for the health of the industry.
“Advice is a real skill and I think it is undervalued.”
Williams said generally people do not want to be too public about how they are going about setting up their own firms.
In November, the initiative hosted a bootcamp event where around 20 people gathered to share tips and concerns about becoming directly authorised, the process of being given permission by the FCA to give advice.
“A lot of [the concerns] were about the application process of direct authorisation and worrying about the interview,” said Williams.
Despite the challenges, Williams said it is still possible for advisers to leave larger firms and set up on their own.
She said: “In this industry it is increasingly harder to go it alone, but at the same time if you are in a big firm and they are making you conform to things you don’t agree with, you can see there is a way to get out and do things on your own.
“It is complicated and risky but if clients are going to stay with you it is quite viable.”
‘Regulation could favour larger firms’
For those going alone, a tightening up of regulation could see smaller firms squeezed out of the market, Williams feared.
She said: “If the FCA was to come out and say you do have to charge a certain way people won’t be able to run a small business anymore.
“You see it now, people trying to charge such small amounts on their MPS that means you have to attract billions in order to break even.”
Williams said there should be a focus on the value advice gives rather than the cost of it.
She added: “There needs to be more people talking about the value of financial advice.”
Breakaway Adviser was launched with two other companies, EV financial solutions and Threesixty Services and aims to give advisers support through the early phase of setting up their business.
tara.o'connor@ft.com
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