Latest figures published in Financial Adviser (30/4/20) reveal a worrying trend in the advice market. Figures gained from a Freedom of Information request to the FCA show that 1,680 advice firms have de-authorised since 2015.
It is not known for certain why numbers are down, but it is thought to be a combination of figures including the increasing costs of regulation, including the difficulty in obtaining Professional Indemnity Insurance, along with new regulations like MIFID and the Insurance Distribution Directive, which have heaped more paperwork onto advice firms. Some of the deauthorisations might also be as a result of consolidation between firms, in particular independent firms moving to restricted ownership, with the number of restricted advisers actually increasing by 6%.
Restricted advisers are only able to provide advice on products provided by their company, they can’t search the market for the best products, unlike Independent Financial Advisers.
As we’ve pointed out before now is the time to take advice – while you can still access an adviser!