This is our seventh annual report of The Financial Adviser Market, again showing the size and nature of the sector but with added details and product data this year.
What happened in 2018? We saw the number of advisers maintained and only rose incrementally. We also saw no significant change in the number of advice firms, which has remained fairly constant for the last decade, only declining slightly over the last four years. There has been a surprisingly substantial jump in 2018 revenue, up by 14% compared to 2017.
Pre-tax profits also jumped significantly in 2018, to £872m, up by even more than revenue at 25% year on year. This is the most significant rise in value terms since 2010, with a £173m uplift. Retained profits have increased over 32% since last year, possibly due to firms preparing for market uncertainty and, consequently, shoring up reserves.
The margins in the sector are starting to increase – they had improved by 10% in 2017 to a now substantial 17% in 2018, when assessing profits before tax. Assessing retained profit margins is also encouraging with firms recording levels at 10 year highs, with the latest sector average showing as 5.96%.