FTAdviser’s 2019 Top 100 Financial Advisers list uses data compiled by our research partner Matrix Solutions, an ISS Market Intelligence company, to provide a snapshot of some of the very best advice companies working in the UK today.
As with the 2018 edition, this year’s list of advisers differs significantly from the rankings produced by FTAdviser in the years up to and including 2017.
Previously based purely on sales, last year the list ranks companies by looking at other factors important to clients seeking the best person to assist them with their finances.
We look at the growth rate of the advisory businesses, the number of years’ experience each business has managing assets in different economic and interest-rate environments, and how well-qualified their advisers are.
In order to check how advisers are managing their clients’ investments, Matrix Solutions used data received directly from fund managers covering 90 per cent of the retail investment market, plus 16 of the nation’s biggest investment platforms. In most cases, that means advice companies’ own platforms are not included.
As a result, the Top 100 Financial Advisers list incorporates not a company’s stated level of assets under management, but rather the amount held on those 16 investment platforms and with most of the nation’s biggest fund houses.
In any case, it is not just about size. As well as factoring in flows of client money, companies’ position on the list also includes a consideration of how their investment choices influenced asset growth over the year.
- Assets under management invested in retail investment funds accounted for an average of 54 per cent of each adviser’s score.
- Net flow accounted for an average of 23 per cent of each adviser’s score.
- Years of service accounted for an average of 10 per cent of each adviser’s score.
- CF30 accounted for an average of 8 per cent of each adviser’s score.
- Staff retention accounted for an average of 3 per cent of each adviser’s score.
- Estimated performance accounted for an average of 2 per cent of each adviser’s score.
Simply calculating the number of financial advisers at a company would also do little other than benefit the larger businesses. So we have split businesses into quintiles, based on the number of CF30 designees, and awarded points depending on which quintile a company was included in.
While this still gives the advantage to the bigger companies, it is not as great an advantage.
The list also takes several other factors into consideration.
In recognition of advice companies’ commitment to their professional development, they were also awarded bonus points for having earned top industry certifications.
Clients also want to know if the adviser they see today will help them through the financial ups and downs of tomorrow. With that in mind, this year’s list also rated businesses on their ability to keep advisers in their ranks.
Experience counts too, especially when uncertainty is greater than usual.
The average Top 100 Financial Advisers company has been in business for 55 years. And the average size of those companies has, in the event, risen notably this year: the typical company now manages £3.4bn in assets by the above metric, up from £2.4bn last year.
One of the side effects of our new methodology is that a small change in an advice company’s data can produce a relatively large change in its placing in the list.
As a result, there has been more turnover than usual in the rankings this year – but this also means the Top 100 more accurately reflects what is happening in the financial advice profession.