Bank and building society adviser numbers have been dealt a fresh hit over the second half of 2013, according to new figures from the Financial Conduct Authority (FCA).
An update on adviser numbers from the regulator has shown that in the bank and building society sector, they have fallen by 23% from August 2013 to date, from 4,604 to 3,556. Numbers had already been in decline in the run-up to the retail distribution review (RDR), dropping from an estimated 6,655 in the summer of 2012 to 4,810 by the end of that year.
Financial adviser numbers have risen only marginally from August 2013 to date, from 21,684 to 21,881. The total number of advisers, including discretionary investment managers and stockbrokers, has fallen by 4.5% over the same period, from 32,690 to 31,220. That follows a rise from 31,132 as at December 2012.
FCA chief executive Martin Wheatley (pictured) said: 'The falls we have seen are not in the IFA space. Generally the IFAs say that the RDR has been a benefit for them and they've seen revenue increases.'
He added that the FCA was exmaining concerns over an advice gap. He said the regulator wanted to discover whethere there is 'an unmet demand resulting in lack of investment from people that otherwise need to save'.
'The single biggest difficulty in how the market has evolved has been the advice gap.'
Nick Poyntz-Wright, FCA director of long-term savings and investment, added that the regulator was conducting an 'exploratory piece of work' on non-advised and simplified advice and how each could play a role in mitigating any gap.
The regulator is hoping to publish its reponse in the second quarter of the year. Poyntz-Wright said the FCA was also looking to see how firms develop non-advised solutions to reach lower-net-worth clients. 'We're keen to make sure the market works effectively for customers, including those customers that perhaps thought the cost of advice is excessive in proportion to the wealth they have got,' he said.
He added the FCA had not yet reached a conclusion on whether pre-RDR trail was negatively affceting consumer outcomes. 'We are not yet at a state that it is such a factor that we need to take action,' he said.
Poyntz-Wright acknowledged that the regulator's attempts to explain the post-RDR definition of independence had failed to dispel confusion in some parts.
'We are hearing the confusion around, "Well, what does this really mean?",' he said. We have made our best efforts to be completely clear but it doesn't seem to be completely working,' he said.