Research points to UK adviser exodus
Significant numbers of Britain's financial advisory force may exit the industry in coming years as the industry undergoes reform.
Research from the UK arm of CoreData found more than 40 per cent of Britain's financial advisers may leave the advice industry by 2015.
Australian ex-pat Craig Phillips now heads up the London office for the Australian research firm.
His research found 15 per cent of advisers surveyed were expecting to leave the industry outright by 2015, 7.3 per cent were expecting to change roles with their current employer and no longer offer advice, and 3.2 per cent were expecting to go to another employer (in a non-advice role).
"Many advisers are now under greater pressure than they have ever been in their careers and significant numbers are now looking for an exit strategy," Phillips said.
"Interestingly, those who are looking to exit the industry have an average of £6 million less in individual funds under advice than those who will remain. This is despite those advisers who are leaving having spent an average of five more years practicing as professional planners compared to those who will remain as advisers past 2015."
The research did not state how many advisers were surveyed. Money Management is seeking confirmation of this information.
The UK Financial Services Authority's (FSA's) reforms to adviser remuneration are in line with those currently taking place in Australia, with remuneration to be agreed between the adviser and their client, rather than between the investment product provider and the adviser.
A further 16.7 per cent of the advisers surveyed said at this stage their employment future was unclear.
"The latter group are perhaps waiting to see how the Retail Distribution Review [RDR] in its entirety will shape up and what it will look like under a new Government (in the event the Conservatives seize power on May 6, although David Cameron's party has backed the essence of the RDR in its current form)," the Core Data article states.
"Meanwhile, the primary nervousness beyond advisers is among the investment administration community (aka platform industry), which is tensely awaiting the outcome of a separate and potentially more significant assessment of the role played by platforms and wraps in a post-[RDR] world," Phillips said.
The FSA is seeking comment on subjects including whether payments from product providers to platforms should be ceased, and is examining the use of platforms by advice firms.
"With so much yet to be decided and so much up in the air still it's not too difficult to understand why so many advisers are uncertain as to their own future," Phillips said.
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