Mere 14 advisers tell FCA virus threatens their survival

Mere 14 advisers tell FCA virus threatens their survival

Only 14 advice firms have admitted to the Financial Conduct Authority the economic fallout of the coronavirus pandemic threatened the survival of their business. 

In June the regulator sent a mandatory survey to 13,000 regulated firms in a bid to take stock of the industry's financial wellbeing in light of the virus outbreak.

According to a Freedom of Information request submitted by FTAdviser 4,545 advice firms responded to the request for data within the one week deadline. 

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A further 134 firms with financial advice permissions submitted responses to the survey past the regulator's deadline and 861 advice firms had failed to provide any response by the end of June. 

But of those thousands of advice firms which did complete the survey only 14 told the FCA that coronavirus threatened the survival of their business, with most of these expecting to stay solvent for at least 6-12 months. 

On face value the figures were seemingly reassuring amid recent predictions the coronavirus pandemic could trigger a greater exodus from the advice profession than that seen in the wake of the Retail Distribution Review. 

Across the wider regulated sectors the FCA received 9,280 responses to its survey within the seven day deadline, whilst 3,315 firms were yet to submit a response at the end of June. 

Alongside the immediate impacts of the pandemic the financial probe was also intended to scope how well the industry might be prepared for any "lumpy" regulatory bills further down the line. 

Earlier this year the watchdog promised "flexibility" to regulated firms which may struggle financially during the coronavirus pandemic.

But in a Dear CEO letter in April the FCA clarified government loans granted to firms in a bid to tackle the coronavirus fallout cannot be used to meet capital adequacy requirements.

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