Industry Statistics

At the Personal Investment Management & Financial Advice Association (PIMFA) we cover the Financial Advice and Wealth Management arena in the UK. This community of financial expertise in the UK is forever changing and the research we produce and the data we collate will represent this, we want to inform and educate you as to the current trends and to the more traditional facets of advising on and managing assets. This section will give a brief overview, and the members section will give greater detail, on how this world is changing and how you can adapt or focus your best efforts in a timely and  efficient manner to take advantage of opportunities that arise.

The Financial Adviser Market:

The Financial Adviser Market: In Numbers Report (Published in 2019) shows the size and nature of the advice sector. The report provides a comprehensive overview of the financial adviser market and the trends within it.

Looking back what happened in the year 2018?

The FAMIN report his year shows how the firms have adapted and survived in quite a turbulent year. There have been a few things to contend with a bedding down of regulations and margin pressure from excessive fees, encroaching on the advisers ability to maintain a cost effective product and service. There has also been a precarious asset environment in the UK in particular, as exemplified by the Woodford scenario and BREXIT being such a contentious issue for investors here, whether domestic or overseas.

The FAMIN report shows that this year there is little change in the types of advice firm for Dec 2018, with appointed representatives and directly authorised advisers both remaining more or less constant which would make sense with so many other external factors to deal with. But average numbers of staff available to advise clients has reached a 7yr high with an average of 4.85 members of staff per firm. This could well be demonstrating how the industry views the importance of client interaction and quality of service and prepares well even during difficult times.

Read the full report here.

The following excerpt is partly taken from ComPeer’s Q4 2018 update of the UK Wealth Management Industry report

The UK Wealth Management industry saw a sharp decline in performance in Q4 following impressive results in the 2nd and 3rd quarters. Total assets fell to £942bn following record levels set in Q3, a step backwards for the industry in the pursuit of the £1 trillion milestone.

Industry metrics for assets, costs and pre-tax profits all decreased following a stable Q3. For Wealth Managers total revenue remained stable to avoid the decline in global markets and rose by 0.24%. However, Execution Only Stockbrokers were less fortunate and saw revenue drop 2.22%, which, due to the size of the wealth management sector, gave a net effect of total revenue equal to £1.833bn- the same level seen at the end of Q3.

Cost have once again risen quarter on quarter in 2018. Total cost for the industry grew 3.07% from Q3. This has caused some compression of profit margins but has been too severe due to the stability in revenue levels. Pre-tax profit margins for Execution Only Stockbrokers fell from 46.4%to 44.4% following a 2.22% dip in revenue and a 1.2% increase in costs. For Wealth Management firms pre-tax profit margins fell from 27.4% to 25.1% for quarter as a result of increased costs. Overall, after a slow start to the year, a strong Q2 and steady Q3, the year ended poorly , with the markets having a significant impact on asset performance, whilst costs continue to rise.

Key Statistics on the UK Wealth Management and Financial Adviser Market

Wealth Management
Key Statistics

Q3 2019

Current Quarter

Previous Quarter

% Change

Same Quarter in Previous Years

% Change

Investment Assets (£billion)

1,011

1,002

1.0%

999

1.2%

Client Trades* (000s)

7,189

7,352

-2.2%

6,551

9.7%

Retail Market Bargains (000s)

2,672

2,569

4.0%

2,692

-0.8%

Total Revenues (£million)

1,880

1,840

2.2%

1,827

2.9%

FTSE UK Private Investor Balanced
Index

4,490

4,409

1.8%

4,309

4.2%

Financial Adviser
Key Statistics

(FAMIN Report 2019)

December
2018

 

Previous Year

%
Change

Notes

Latest No of Financial Adviser Firms

13,667

13,690

-0.2%

Basically no real change here

Consolidated Revenue (for all Regulated business)

£4,242m

£3,774m

12.4%

A strong revenue increase for firms

Pre-Tax Profits

£872m

£699m

+24.7%

A bigger increase than last year

Retained Earnings

£303m

£230m

31.8%

There was some tracking back to prior higher levels of Retained Earnings last year, but still this year has ramped up well

Pre-Tax Margins

20.6%

18.5%

11.3%

Double figure rise in pre-tax margins, fairly significant increase mainly due to the size of the pre-tax profits this year rather than the revenue factor

* participating firms only

[1] Investment Assets and Revenue are for the total market, based on extrapolated quarterly survey participant data.  Participants account for over 60% of total market assets and 65% of total market revenue. Client trades represent participating firms only.  Retail market bargains are for UK Retail Stockbrokers.

With thanks to ComPeer limited: www.compeer.co.uk