A recent survey of 166 companies by adviser forum Panacea Adviser found the financial impact of the Covid-19 outbreak could irreparably damage 14 per cent of advice businesses unless they are able to secure additional funding.
The research found that while 45 per cent of advisory practices did not think they would have to furlough workers, 44 per cent said they would have to consider the option. Furthermore, 18 per cent of those surveyed had asked for government support.
As reported by FTAdviser, Derek Bradley, founder of Panacea Adviser, said: “While old-fashioned sole traders or traditional partnership-style firms can put their own personal wealth into the business, many others risk failing over the course of the year.”
The FOI requests also showed that the overall number of advice companies rose again last year, from 35,537 to 36,616. But this was driven by the number of companies classifying themselves as either restricted advisers or companies providing both restricted and independent advice.
The latter would likely include restricted companies that have acquired independents but have yet to fully integrate them into their business.
The number of advisers providing restricted advice alone rose by 5.4 per cent between 2018 and 2019, increasing from 11,098 to 11,699 over the period.
UK adviser numbers, 2013-2019
Source: FTAdviser/FOI. Notes: 'Both' = overall number of advisers at companies that provide both restricted and independent advice. Type of advice provided by each adviser at these businesses is unknown. FCA categorisation of restricted advice changed in 2017, when more companies opted not to disclose these details.
The FOI requests also showed that, as of March 3, there were 9,095 CF30s on the Financial Services Register. This is the customer-dealing function that exists within the approved persons regime.
According to the Financial Conduct Authority, the customer-dealing function is undertaken by individuals who undertake the company’s regulated activities directly in relation to customers of the company. This includes, but is not limited to, the provision of advice.
In an FOI response, the FCA said: “We are presently in a transition period between APER and the Senior Managers and Certification Regime.
“This has led to a low number of CF30s as the APER regime only continues to apply to small subset firms which are not SMCR firms as per APER.
“Under SMCR, financial advisers will become certified and assessed persons.”
The Directory of Certified and Assessed Persons is expected to be published soon, which should provide more information.
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