Yet again we appear to face a year of uncertainty with question marks over the state of the global economy. Despite the rising demand for financial advice, the product providers are still facing challenges which have not been helped by Solvency II capital requirements. This has led to some stealth lay-offs of BDMs as companies seek to reduce numbers while reserving the right to replace if the need arises. As a result, several major players are threatening to exit the UK market. So we may well see M&A activity driven by cost.
In contrast with the cost challenges faced by providers, legislative change in the form of pension reforms is giving the financial advice industry a shot in the arm. There are 22,557 Financial Advisers (source: Financial Adviser 7th January 2016) but demand is certainly out stripping supply.
As we reported in previous articles, the growth of the vertically integrated financial services firm continues despite challenges from the FCA. It looks like the world of financial advice may finally move from being a cottage industry to a number of large financial advice practices managing clients’ assets in a professional and ongoing manner.
There are a number of consolidators seeking to acquire client assets under management, the demand for good Advisers to look after these clients is continuing to grow.