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 2018) 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 2017?

  • Well 2017 had actual physical advisers rise to a degree, but adviser firms dropped similarly. So, you can say there is a strong demand for advisers out there still
  • 2017 Turnover increased by a massive 22% from 2016
  • Retained Profits have even blown that out of the water, as they more than doubled that of 2016. So there may have been additional regulations to deal with and a precarious macro environment but profits are still considerable

2017 Fees and Commissions both moved significantly, by 28% in total, demonstrating it is still lucrative to be in the wealth management arena.

 

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

Current Quarter

Previous Quarter

% Change

Same Quarter in Previous Years

% Change

Investment Assets (£billion)

942

989

-4.7%

958

– 1.6%

Client Trades* (000s)

6,259

6,555

-4.5%

6,895

-9.2%

Retail Market Bargains (000s)

3,005

2,692

11.6%

2,733

10.0%

Total Revenues (£million)

1,833

1,833

0.0%

1,745

5.1%

FTSE UK Private Investor Balanced
Index

4,

4,309

-6.0%

4,268

-5.1%

Financial Adviser
Key Statistics

December
2017

Previous Year

%
Change

Notes

Latest No of Financial Adviser Firms

13,690

14,254

-4%

This can be down to consolidation, M&A activity, as well as some firms hanging up their boots

Consolidated Revenue (for all Regulated business)

£4,484m

£3,692m

21.5%

A strong revenue increase for firms

Pre-Tax Profits

£699m

£569m

+23%

Retained Earnings

£230m

£102m

125.5%

The prior years were subdued looking at the last 7yrs and so this involves some tracking back to prior higher levels of Retained Earnings and a very good improvement this year too.

Pre-Tax Margins

15.6%

15.4%

1.1%

More or less flat

* 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