David tops Goliath: Why the big firms are losing money

clock

New figures suggest the bigger your business, the less profitable it is likely to be. But why? And how big (or small) should a firm be to maximise profits? Rahul Odedra investigates…

According to unpublished figures put together by the FSA, businesses with more than 50 advisers are struggling, while the vast majority of firms with fewer practitioners are enjoying healthy profits. According to the data – collected from firms’ RMAR records and based on firms’ 2009 calendar year returns – the smaller your practice, the less likely it is to record a loss. Just 8% of the 1,423 sole trader businesses lost money during the period, and 10% of firms with between five and ten advisers (see table below). The figures contradict the perceived wisdom that the next step for a...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Treasury's AR consultation: Extending the FOS' scope a 'concern'

Treasury's AR consultation: Extending the FOS' scope a 'concern'

‘FOS needs to be overhauled as it is’

Isabel Baxter
clock 19 February 2026 • 4 min read
In Accord launches advice firm client investment 'badge' initiative

In Accord launches advice firm client investment 'badge' initiative

To demonstrate commitment to understanding client needs

Laura Purkess
clock 17 February 2026 • 2 min read
Feel Good Friday: Quilter pledges £3m towards financial education

Feel Good Friday: Quilter pledges £3m towards financial education

Alongside £1m in grants supporting charities

Professional Adviser
clock 13 February 2026 • 1 min read