Tables have turned
The trend is a reverse of how the industry behaved in 2012, when RDR was due to come into effect at the turn of the year.
According to the Financial Conduct Authority’s final Financial Advice Market Review report, there were nearly 10,000 advisers working in banks, insurers and building societies in 2011. By October 2014, this had dropped to around 6,000 advisers.
Overall, adviser numbers fell from by about 10,000 to just over 30,000 in the same time period.
The drop came as large names fled the advice industry. Lloyds axed its mass-market investment advice service in 2012 and 650 jobs were lost when HSBC ditched its tied-advice service in the same year.
It was clear new rules prevented advisers in banks from behaving as salespeople. In 2014, Nationwide reported a 40 per cent drop in sales of investment and protection products, which it said was a result of RDR.
The potential encroachment of large providers on the advice market did not concern commentators, however.
Ms Hopkins said vertically integrated companies were often viewed negatively, but argued that “anything that helps more people access advice is good for consumers”.
She added: “The more consumers have access to advice, the better. The more providers recruit and train advisers, the better.
“With more responsibility being put on the shoulders of individuals to secure their retirement, the demand for advice will continue to grow.”
Keith Richards, chief executive of the Personal Finance Society, agreed. He said well-capitalised and financially sustainable businesses could play an important role in increasing the accessibility of advice services and attract new talent to the profession.
He added: “It is important to enhance the image of this sector as a highly skilled profession, rather than a more transactional industry.
“There will always be an important role for small, independent intermediaries.”
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