Well, that’s been quite a week, hasn’t it? I think the only thing that could top it in the week to come is if Neil Woodford admits to a strong fondness for Colombian marching powder in his twenties and is immediately elected leader of the Conservative party.

I think we’ve all had enough of That Fund for now, so to block it out I’ve been luxuriating in a new bubbly bath of data. Some of that is from a YouGov poll we’ve commissioned (our first ever for the lang cat; very exciting) all about ISA investors and their wily ways. It’s to the point but interesting – much like our very own Terry Huddart – and I’m not going to tell you any more just now because it would spoil it. You’ll have to wait.

But Vördermän, the Norse god of data, basic arithmetic and conditional formatting smiles on us yet still further, and bestows his munificence through his emissary on Earth (Stratford branch). Which is another way of saying that we have new stats from the FCA on how the adviser market looks based on full year 2018 figures.

These are just preliminary at the moment; no doubt soon PIMFA will do its annual detailed round-up which is pretty good and worth paying for, as indeed all good research is. Hint.

So what do we now know of that we were hitherto ignorant of? Well, first up the big trend that everyone predicted about how consolidation of adviser firms was going to reduce the overall number of firms massively hasn’t happened (yet). We read about consolidation every week, but it’s a drop in the ocean. In fact, the number of firms who reported deriving revenue from investment business (that’s most of you reading this) was up to 5,131 from 5,048 in 2017. So 83 firms appeared from somewhere. Adviser numbers, based on RMAR returns, increased by 1%.

How come? Well, firms that have been scarfed up by a consolidator don’t stop existing immediately: if you follow the SJP model the original firm can hang around for quite some time before accepting full Borg-level assimilation. But it might also just be that in the great scheme of things it’s not happening to that many firms.

I was pleased to see that revenues are up – £4.42bn from £3.9bn or so in 2017. Rising markets, pension freedoms, DB transfers, increased services; whatever – it’s a very good sign. A bit less good is a fact a wee bit more hidden away, and that is that, in aggregate, pre-tax profit as a percentage of turnover has fallen. The bigger a firm is the less money it makes as a percentage.

So one-man bands score 43% – very nice – but by the time you’re in the 6-50 adviser band you’re down at 19% which isn’t where any professional services business wants to be. And big firms, with over 50 advisers, made a loss on aggregate, though this is down to a few super-size firms  (hello SJP!) posting very nasty losses indeed.  Happily they make it up in other ways, which in no way include exit fees. No sir. Our lawyers are quite clear on that point. AFH, for example, did much better with a 50% margin.

And talking of big firms, did you know that there are only 42 firms with over 50 advisers? But those 42 firms have about half the market in terms of adviser numbers.

Anyway, there’s more on that FCA link, but it all looks very much to me like a sector which is still fighting to find its mojo in a commercial sense; good at getting clients, good at charging fees, but not great at controlling costs and generating efficiencies.


  • Have a read of pages 47 and 48 of this consumer research about best buy lists. I promised not to write about That Fund, but have a read anyway.
  • Lookit! Some friends of the lang cat, Montage Wealth Management, are the NMA adviser profile this week. Nice to see, and if you like their logo and visual identity and stuff then we are pleased to have been responsible for at least some of it. If you hate it then we were nothing to do with it.
  • And your music shot this week is what I can only assume is a favourite of most of the front-runners for the Conservative leadership. It’s – of course! – Snowblind by Black Sabbath. Here’s the version from the 1978 Never Say Die film. Total genius.

See you next week