Article by Christina
A new survey by Octopus Investments shows that the financial advice market is under real threat as more and more advisers leave the market.
According to their survey, 29% of advisers said they intended to leave the market in the next five years, a figure which rises to 58% over the next ten years – mainly due to retirement. With the current total number of advisers standing at only 26,600, in ten years’ time that figure could be as low as 11,200. If that happens there would effectively be one financial adviser for every 5,800 people! Today the figure is already stark with one adviser per 2,400 people.
If these numbers are not addressed, we will only continue to see the cost of advice rocket and become increasingly the preserve of the wealthiest. This cannot be in anyone’s interest. With earnings on the increase more people need the benefit of a financial advisor to help them to secure the futures they have worked for.
Why are the numbers falling? It’s down to a combination of factors. The increasing cost of regulation acting as a barrier to investment into the advice sector, poor pathways for students to enter the profession and the demographic of existing advisers meaning that a substantial number are coming up to retirement age.
It is vital that the Government takes notice of this trend if they are serious about dealing with the “advice gap” between the rich and everyone else, which they should be.
If you already have a financial adviser, I’d advise you to keep hold of them (as long as you’re happy) because there might not be a lot of choice going forwards!
