PIMFA
Industry Statistics
PIMFA is the voice of professional and personal wealth services, including Financial Advice, Financial Planning and Wealth Management across the UK. This section provides information on some of the latest trends and data across our industry that we have curated by working with industry partners on joint research or that has kindly provided by our supporters.
Financial Adviser Business Benchmark Report
NextWealth has combined forces with PIMFA to publish an update to your annual Financial Advice Business Benchmarks report. It aims to allow financial advice professionals to compare their firms with those of their peers.
The results in this year’s report are based on a survey of over 300 financial advice professionals conducted between July and August 2024.
In this sixth collaborative annual benchmark report, we revisit key benchmarks to evaluate the health of the advice industry. A commitment to organic growth has emerged this year and we explore this further in our findings.
Key findings include:
- Confidence levels are highest in areas under a financial advice firm’s direct control: 92% of financial advice professionals are confident in their firm’s ability to deliver good value for money.
- Conversely, confidence levels are lowest around areas driven by external factors: 26% are confident in the capability of the regulator.
- Total client cost increased in the past year from 1.75% to 1.89%.
- Nearly half (46%) of respondents said that their number of active clients has increased – up from just over a quarter (29%) in 2023.
- Only one-fifth are satisfied with their tech stack and are not looking to make a change, which is the lowest level since 2020.
The following excerpt is partly taken from ComPeer’s Q4 2023 update of the UK Wealth Management Industry report
UK wealth management firms can start to see the light at the end of the tunnel as the markets showed signs of bouncing back in the final quarter of the year. This was a key contributor to a 4.5% rise in asset levels, taking it to a new high of £1.39 trillion – after 6 consecutive quarters of failing to reach the heights the industry saw in early 2022.
Firms will therefore welcome the positive impact this will have on key revenue streams such as investment management fees, which have stalled throughout the past year. Thankfully, net interest income has been a saviour for many firms (especially Private Banks and Execution Only Stockbrokers) and so despite revenues being slightly down in Q4 compared to Q3, for the year as a whole there was growth of 8% compared to 2022.
However, the ongoing story for this sector is a lack of scalability. Too often when assets and revenues rise, costs too surge. Firms have supported their staff through the cost of living crisis, offering above inflation rises on remuneration packages. Combining this with the endless rise in compliance costs and a substantial uplift in technology expenditure, many witnessed a squeeze in profitability in 2023.
There is however optimism for 2024. Firms will be wishing for the markets to continue to recover, reducing the reliance on interest income, whilst also starting to see the efficiency paybacks from their investments in technology.
*Provided by CompeerÂ
Key Statistics on the UK Wealth Management and Financial Adviser Market
Wealth Management Q4 2023 | Current Quarter | Previous Quarter | % Change | Same Quarter in Previous Years | % Change |
Investment Assets (£billion) | 1,391 | 1,331 | 4.5% | 1,278 | 8.8% |
Client Trades* (000s) | 9,405 | 9,324 | 0.9% | 8,291 | 13.4% |
Retail Market Bargains (000s) | 2,900 | 2,664 | 8.9% | 3,619 | -19.9% |
Total Revenues (£million) | 2,380 | 2,422 | -1.8% | 2,420 | -1.7% |
FTSE UK Private Investor Balanced | 5,164 | 4,944 | 4.4% | 4,822 | 7.1% |
Financial Adviser (FAMIN Report 2021-2022) | December
| Previous Year (2019) | % | Notes | |
Latest No of Financial Adviser Firms | 14,065 | 13,779 | 2.05% | Not a big change here | |
Consolidated Revenue (for all Regulated business) | £5,130m | £4,242m | 18.9% | A revenue increase for firms | |
Pre-Tax Profits | £728m | £808m | -10.4% | A decrease to in the last year | |
Retained Earnings | £186m | £204m | -9.23% | ||
Pre-Tax Margins | £728m | £808m | -9% | This represents a second successive decline in pre-tax profits, thought still slightly higher than seen in 2016 and 2017. |
* participating firms only
[1] Investment Assets and Revenue are for the total market, based on extrapolated quarterly survey participant data. Participants account for over 60% of total market assets and 65% of total market revenue. Client trades represent participating firms only. Retail market bargains are for UK Retail Stockbrokers.
With thanks to ComPeer limited: www.compeer.co.uk
