One third of all advice firms in the UK are considering offering simplified advice, a new survey by the UK’s regulator, the Financial Conduct Authority (FCA), has found.
Responding to the survey, a third of all firms, and three fifths of large firms, said they were considering this, following a consultation into the Advice/Guidance boundary by the FCA earlier this year.
Simplified advice is a streamlined, lower-cost form of financial advice that would focus on straightforward needs that wouldn’t require a comprehensive financial review, like investing a one-off sum of money. The aim is to close the ‘advice gap’ in the UK, with just 9% of households receiving financial advice, while it is believed many more families would benefit from it.
“We know consumers are also looking for advice and support online and we want more firms to meet them where they look for this support,” the FCA said in a release. “There may be opportunities for firms to innovate and grow, particularly through the Advice Guidance Boundary Review, digital transformation, client demographics, more diverse talent pipelines, and progress under the Consumer Duty”.
Demographics in the industry
The survey found that there are around 31,000 advisers in the UK, which remains stable, while there are around 5,500 firms offering financial advice – a 15% drop since 2021, with consolidation continuing to reshape the UK advice market.
It also looked at demographics and found slight improvements in the number of women and younger advisers, although these still remain imbalanced in terms of roles. Female advisers make up around one in five people in the profession, while 50% of advisers are under the age of 50, with the proportion under 40 rising steadily since 2023.
Chris Jones, academy director at Quilter, said: “The FCA’s survey shows encouraging signs that the advice profession is starting to renew itself. The average adviser age has fallen to the late 40s, reflecting an increase in younger advisers entering the market and showing that entry routes into the profession are beginning to gain traction.
“However, the data also shows where progress remains uneven. Only 18% of advisers are women, despite women making up a much larger share of paraplanners and support staff. That points to a progression challenge rather than a lack of interest in the profession. The FCA’s findings underline why this work needs to continue. A younger adviser profile is a positive step, but flat overall adviser numbers and a persistent gender imbalance show that existing pipelines are not yet strong enough on their own.”
AI adoption and technology
The survey also touched on how firms are using artificial intelligence and changing technology, and found many firms said they are considering the use of AI in three main areas: supporting client engagement, strengthening compliance and risk monitoring, and improving operational efficiency through automation (eg. meeting notes).
However, few firms believed they would deploy AI within their advice processes in the near term, with just 14% of small firms agreeing with this – rising to 38% among medium sized firms and even higher in larger firms.
When it comes to digital capabilities, 65% of large firms said they either have or are considering a mobile app, compared to 31% of small advice firms.
Rob Hillock, head of personal financial planning at consultancy Broadstone, said: “Technology and AI are clearly becoming a differentiator, but adoption remains uneven, creating a growing divide between firms that are investing in more efficient, data-driven advice models and those that risk falling behind as client expectations continue to shift.”
