Financial Adviser Insights and Trends of 2023

Jan 10, 2024 | Blog | 0 comments

Financial Adviser Insights and Trends of 2023

As we gear up for a busy 2024, let’s take a quick look back at the Financial Adviser Insights and Trends of 2023. With over 5,000 financial advisers in the UK, how did the financial advice market fair in 2023 and what can we expect as kick off a new year?

1. Just How Many IFA Firms are there in the UK?

In 2023, the UK had a whopping 5,199 IFA firms, proving it’s big business. Sure, that was a teeny bit less (0.3% to be exact) than in 2022, but all in all, the industry held its ground pretty well.

Over the five years leading up to 2023, the number of IFA firms didn’t really jump up or down dramatically. This steady state suggests that, despite the economic rollercoasters and regulatory loop-de-loops, IFAs were doing something right to keep things stable.

2. The Big Fish in the Pond

It’ll come as no surprise to many that St. James’s Place were leading the charge in 2023, announcing 4,766 advisers at the half year point.

Looking back, 2023 was a year of holding steady and proving resilience for the UK’s IFA industry. Despite a tiny dip in numbers, the regional spread and the market dynamics showed an industry that was vibrant and diverse.

3. A Moderate Slice of the Pie

In the grand scheme of things, the top four companies in the UK’s financial advice industry hold between 40% and 70% of the market share. That’s moderate compared to the average concentration in the Finance and Insurance sector, which stands at about 13%. It suggests a healthy balance of big and small players in the field.

4. Location, Location, Location

Leading the pack, London was the place to be. It’s no surprise, really – given its financial hub status, it’s the city where money talks.

Not far behind, the South East and North West had their fair share of action, respectively. Not surprisingly, it seems like the higher the disposable income in an area, the more financial advisers you’re likely to find.

5. The Costs of Running an Financial Advice Business

Wages take up a hefty 42.3% of revenue here. This highlighted how crucial skilled staff were to the game – it’s a people business, after all.

6. The Impact of Economic Climate on Financial Advice

The economic climate in 2023 was, to put it mildly, a bit of a rollercoaster. Consumer confidence took a hit thanks to inflation and recession worries, making things a bit tricky for financial advisers. And with the rise of financial robo-advisers, traditional in-person advice faced some digital competition.

7. Looking Ahead: The IFA Industry from 2024 to 2029

Brighter Days on the Horizon? Good news! The market size is projected to grow over the next five years. As the economy stabilises, we can expect an uptick in demand. With disposable incomes and business activities getting a boost, things are looking up for the industry.

There you have it – a whirlwind tour of the financial advice industry in the UK in 2023. From the steady number of firms to the challenges and opportunities they face, it’s clear that financial advisers are a resilient bunch. With the industry expected to grow in the coming years, we can look forward to seeing how these advisers continue to evolve and adapt in an ever-changing financial landscape.

If you’re looking to get in to the financial advice world, why not check out our blog on Building your Brand as a New Financial Adviser.

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