Lighthouse Group's chief executive has questioned the long-term viability of the financial services industry after latest figures showed a quarter of advisers had quit between November 2011 and January this year.
CEO Malcolm Streatfield argued that the traditional avenues for bringing new advisers into the industry have been closed off because companies that would normally have taken them on can no longer afford to.
He said: "I sense very few new advisers are joining the industry. And with attrition rates like that reported by APFA - which saw 5,000 of 26,000 advisers leaving the industry between December 2011 and January 2013 - it makes you wonder how long the industry can sustain itself."
Streatfield explained that prior to regulation, advisers cut their teeth at the providers such as Prudential and the Co-operative before branching out and becoming IFAs, but he said this route was shut off because product costs became too high for these companies.
Similarly, he said that banks and building societies have been regulated out of providing advice and the advisory community simply cannot afford to take on new starters on mass.
"Last year there was a call in the industry for simplified advice - QCF level 3 - for non-sophisticated clients, this would have been a potential way in for junior advisers.
"However, the only way a model like this could be a success would be if rules relating to that advice were reduced or weakened. Now it's QCF level 4 advice or nothing.
"So many advisers have left, and more are leaving, that I would ask whether the industry is really viable in the long term."
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