New research from British financial regulators show that financial advisor numbers in that country, which dipped with the introduction of new rules outlawing third party commissions and boosting proficiency requirements, are now rebounding as more advisors bring their qualifications up to snuff.
The UK Financial Conduct Authority (FCA) released new research into advisor numbers Thursday that shows that there were 32,690 retail investment advisors working in the UK in July, up from 31,132 in December 2012, which is the last time the numbers were officially counted.
The FCA says that the increase is attributable to advisors re-entering the market in the wake of the new requirements taking effect at the start of this year as part of its reforms known as the Retail Distribution Review (RDR).
The FCA notes that the new rules require retail investment advisors to attain a higher standard of qualification, adhere to ethical standards and carry out continuing professional development. Advisors also need independent verification that they are meeting the standards in the form of a statement of professional standing from one of eight accredited bodies.
Six months after the introduction of the new rules, the FCA reports that 97% of advisors have the appropriate level of qualification, and the other 3% are recent entrants to the industry who are still studying for full qualification within the time periods permitted by the rules. It also notes that back in 2010, less than half of all advisors were qualified to the current standards.
Clive Adamson, director of supervision at the FCA, notes that, “Today’s figures show that those looking for financial advice still have plenty of options open to them. What’s more, by establishing standards across the industry we are helping to build confidence by reassuring consumers and raising the profile of the adviser profession.”
The FCA also published research today from an outside firm that examined the intentions of financial advisors ahead of the introduction of the RDR reforms. That research predicted that total advisor numbers would be about 35,000 after the reforms took effect. By sector, the biggest shortfall from those predictions has been in the numbers of bank-based advisors, it predicted about 6,600 would remain, and there are just over 4,600 instead. Conversely, it predicted that there would be less than 900 discretionary advisors, and there are almost 1,800 of those according to the latest FCA data.