Industry Statistics

At 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 seventh in PIMFA’s series of annual reports on “The Financial Adviser Market: In Numbers”, describing the size and nature of the advice sector, shows a vibrant industry coping well against a backdrop of increased regulation and market volatility.

Conservative estimates of AUM for the Financial Advice and Wealth Management sectors stand at approximately £272Bn and £942Bn respectively. Whilst the slight contraction in the overall number of firms continues, there has been an increase in the number of advisers per firm – up to just under 5, showing an improvement in client service. Revenue is up by a significant 14% on 2017, pre-tax profits jumped by 25% to £872 M, the most significant rise since 2010, and retained profits are up by over £70 M to £303 M, with overall sector margins averaging 17%.

As to industry sentiment, whilst many consider the current regulatory burden as excessive, there is a feeling that regulators should “get more involved in the industry”, particularly where this relates to the continual and unacceptable increases in the FSCS levy, enforcement action against those who cause reputational damage to the industry and that regulation should be tailored for smaller firms too.

Overall, there is a desire to serve clients better through the removal of excessive administration, plus a streamlining of regulatory and compliance requirements, which PIMFA expects to take shape over the coming months as we prepare for our departure from the EU.

Read the full report here.

The following excerpt is partly taken from ComPeer’s Q4 2021 update of the UK Wealth Management Industry report

The UK Wealth Management industry finished the year with a strong final quarter, with firms taking advantage of market growth to surpass £1.3 trillion of investment assets.

The results were very encouraging for Wealth Managers, who were able to report growth across all income streams, setting a record for quarterly total revenue in the process. When the calendar 2021 results are therefore finalised, it is highly likely there will once again be a new all-time high revenue figure.

Investors remained active in terms of trading, thereby resulting in another strong quarter and year for Execution Only Stockbrokers, who also benefitted from a good rise in custody & administration fees as investors continue to be attracted to the self-directed propositions.

Cost control, however, remains a concern, with both firm types witnessing 4% increases quarter on quarter. Although in Q4 they were able to improve margins as a result of the strong growth in revenues, the issue of forever increasing costs will need to be addressed – especially given the start we have seen to 2022 with the Ukraine crisis causing severe disruption in the markets and inevitably causing assets values to drop sharply, and therefore heightened pressure on revenues.

Key Statistics on the UK Wealth Management and Financial Adviser Market

Wealth Management
Key Statistics

Q4 2021

Current Quarter

Previous Quarter

% Change

Same Quarter in Previous Years

% Change

Investment Assets (£billion)

1,327

1,271

4.4%

1,151

15.3%

Client Trades* (000s)

10,457

10,259

1.9%

12,629

-17.2%

Retail Market Bargains (000s)

4,700

4,601

2.2%

5,189

-9.4%

Total Revenues (£million)

2,149

2,029

5.9%

1,948

10.3%

FTSE UK Private Investor Balanced
Index

5,221

5,047

3.4%

4,758

9.7%

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