Two companies have broken into the first 10 of this year’s top 100 list of financial advisers.
In Partnership – formerly known as On-Line Partnership – has seen the value of its gross sales almost double to £1.7bn this year from £900m last year. This growth enabled it to jump by nine places from 19 to 10.
Likewise, Brooks Macdonald moved back into the top 10 from 11th place last year.
Overall, most firms have seen a growth in the value of their gross sales.
Since the advent of pension freedoms this has created a bigger demand for pensions advice.
The Top 100 list, compiled in conjunction with Financial Clarity, formerly known as Matrix Solutions and part of Strategic Insight, recognises successful financial advisory practices across the UK as indicated by gross sales of investment and pension products between the third quarter of 2016 and the second quarter of 2017.
Banks fall out of Top 10
The other big change at the top is that the only two banks that were in the top 10, Barclays and HSBC, have now been pushed down to 17 and 18 respectively. Barclays was previously at number eight and HSBC at number 10.
The year 2016 was when banks appeared to make a marked re-entry into the advice market. They are said to be able to provide fairly low-cost advice because they have an existing and shared infrastructure with the other elements of their business.
But questions have been raised over how cheap their services really are.
In April 2016 HSBC launched a standalone investment advice offering at a 30 per cent discount to its full Premier Financial Advice service, following a trial period earlier in the year.
The new service was designed to provide advice for customers looking to invest single lump sums of between £15,000 and £100,000.
Customers qualified by having £50,000 or more of savings or investments – the point at which they would normally move to its Premier and Wealth banking services.
At the time it said it was charging a report-only fee of £294 and 1.93 per cent of assets. For the full HSBC Premier Financial Advice the report-only fee was £420 and the charge 2.75 per cent.
Some advisers at the time said that a fully qualified IFA with 25 years' experience could provide an advisory service for 0.75 to 1 per cent lower in charges.
Last November, Barclays launched an online investing service in a bid to take on advisory rivals such as Hargreaves Lansdown.
According to Barclays the service would make it easier for people to manage their own investments and plan for the future, while customers of the bank would have online banking and investment accounts fully integrated for the first time through one login.
Challenges
Current and future regulatory changes remain a challenge.
Next year sees the introduction of Mifid II, the General Data Protection Regulation (GDPR) and the Second Payment Services Directive (PSD2).
Increasing regulatory requirements ahead of these changes have helped discretionary fund management (DFM) businesses grow as a result of advisers outsourcing cases.
Another big issue is how advisers can attract talent into the sector.
Without an influx of quality advisers who can carry on an existing legacy, the advice gap will widen.
Acquisitions have also played a role in some of the movements that have taken place. Wealth at Work joined the top 100 due to its acquisition of Affinity, but dropped off this year.
Anderson Strathern is the other notable group not making it to the top 100 this year, after last year when it was ranked 66th with £180m gross sales.
Ima Jackson-Obot is a features writer of Financial Adviser
