Adviser market revenue growth stalls in 2019 - FCA data

Adviser market revenue grew from £3bn to £4.4bn between 2015 and 2018 but, from 2018 to 2019, increased by only £0.03bn (0.7%).

As for how that revenue is made up, 82.9% comes from advising on retail investments, 11.8% is revenue from insurance advice and 5.3% from mortgages.

Advice firms with between six and 50 advisers, however, appear to be the most efficient at generating revenue. Those medium sized firms generated £189,449 in revenue per adviser in 2019, while small advice firms of two to five advisers generated £186,444 per adviser.

One-man bands made £166,019 revenue on average, while the largest firms of 50+ advisers made the least revenue per adviser at £160,303.

Those revenues do not directly translate to profits, though. One-man bands made an average £89,155 pre-tax profit, while firms with two to five advisers made an average £197,765. Those medium firms of six to 50 advisers, which made the most revenue per adviser, averaged an average pre-tax profit of £425,527 and the big firms of 50+ advisers made a pre-tax loss average of £1.02m.

The vast majority of small and medium-sized firms made a profit, while just 72% of big advice firms turned a profit in 2019. The overall pre-tax profits for financial advice firms was down 7% year-on-year in 2019 - from £872m to £808m.

Restricted advisers are still slowly closing the gap on IFAs in terms of revenue too, the data showed. Restricted advisers made up 38.5% of market revenue in 2016 and that figure has continued to creep up over the last few years and in 2019 sat at 40.8%.

• Tweet  
• Facebook  
• LinkedIn  
• Send to  

• Topics
• Your profession