United Kingdom (UK) Financial Advisors 2021 - Trends, Concerns, and Opportunities
Description
United Kingdom (UK) Financial Advisors 2021 - Trends, Concerns, and Opportunities
Summary
The UK’s financial advisors have proved remarkably resilient to the COVID-19 pandemic, with many reporting an uplift in demand for advice and average revenues increasing for all sizes of firms. Nonetheless, there are challenges. Increasing professional indemnity insurance (PII) premiums and a high Financial Services Compensation Scheme (FSCS) levy are putting pressure on costs, while a looming wave of new regulation such as the Consumer Duty proposals is pushing many smaller advice firms to sell their businesses. These pressures - combined with an influx of private equity money into the industry - is fueling a growing wave of consolidation, which is slowly but surely changing the shape of the market. Addressing the advice gap and considering new business models arguably provides the greatest opportunities for financial advisors, by allowing them to expand beyond their traditional client base of older, affluent consumers. However, banks and investment managers are also expanding their wealth operations and are starting to prove a greater competitive threat.
This report discusses the key trends shaping the UK market for financial and investment advice over the course of 2021. It covers the size and growth of the financial advice market in the UK (including profitability), merger and acquisition activity, as well as the key threats and opportunities cited by advisors.
Scope
Summary
The UK’s financial advisors have proved remarkably resilient to the COVID-19 pandemic, with many reporting an uplift in demand for advice and average revenues increasing for all sizes of firms. Nonetheless, there are challenges. Increasing professional indemnity insurance (PII) premiums and a high Financial Services Compensation Scheme (FSCS) levy are putting pressure on costs, while a looming wave of new regulation such as the Consumer Duty proposals is pushing many smaller advice firms to sell their businesses. These pressures - combined with an influx of private equity money into the industry - is fueling a growing wave of consolidation, which is slowly but surely changing the shape of the market. Addressing the advice gap and considering new business models arguably provides the greatest opportunities for financial advisors, by allowing them to expand beyond their traditional client base of older, affluent consumers. However, banks and investment managers are also expanding their wealth operations and are starting to prove a greater competitive threat.
This report discusses the key trends shaping the UK market for financial and investment advice over the course of 2021. It covers the size and growth of the financial advice market in the UK (including profitability), merger and acquisition activity, as well as the key threats and opportunities cited by advisors.
Scope
- The number of financial advice firms fell by 1.9% in 2020, with 99 fewer firms in the market compared to 2019. Significantly higher levels of consolidation in 2021 are likely to see the number of firms fall further still.
- Financial advisors are the most used channel for pensions and investment advice, with 32.2% of consumers turning to advisors for pensions and 33.5% for investments.
- 27.0% of financial advisors consider a financial market downturn as the key threat to their business. On the other side of the coin, 30.0% see it as the greatest business opportunity.
- Understand the latest data on the size and composition of the UK financial advice market
- Find out about the latest M&A deals in the consolidating financial advice market
- Learn who uses financial advisors and what their motivations are for doing so
- Discover what financial advisors consider to be the main opportunities and threats for their business
- Ascertain how financial advisors are using platforms and find out which platform providers are their preferred choices
- Gain insight into how financial advisors determine their investment management strategy
Table of Contents
55 Pages
- Market overview
- Key findings
- Critical success factors
- The number of advice firms fell by 1.9% in 2020
- Consolidation is leading to the creation of more large financial advice firms
- Average revenues were buoyant in 2020, but rising costs are a dampener on profit growth
- Financial advisors are the leading channel for investments and pensions
- Financial advisors’ clients tend to be older, affluent individuals
- Retirement is the number one driver for seeking advice
- Threats: A market downturn, increased competition, and the regulatory burden are the key concerns of advisors
- Financial market downturn: Threat or opportunity?
- Banks and investment managers are increasingly targeting investors directly
- Regulation came to the fore again in 2021
- Opportunities: A market downturn, new business models, and digitization offer the greatest business opportunities
- Developing new business models to improve access to financial advice
- The aging population represents a growth opportunity
- ESG investing is becoming more important to investors
- Service provision: Platform usage is well established, with a strong degree of competition
- Service provision: The investment management needs of financial advisors are changing
- Abbreviations and acronyms
- Definitions
- Methodology
- Secondary sources
- Further reading
- About GlobalData
- Contact Us
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