The UK financial advice market is highly fragmented, comprising some 15,500 directly authorised firms. However, it is also becoming increasingly consolidated, as difficult market conditions force some firms to merge or join networks and others to exit the market altogether. These trends are set to prevail, as new regulations, relating to professional standards and capital requirements, put pressure on smaller and under-capitalised firms.

The mortgage intermediary market in particular is going through a tough time. The past year has seen a sharp decline in mortgage intermediary sales, due to reduced product availability and lenders shifting focus onto direct business in order to increase margins. The downturn has also hit related sectors, such as mortgage-linked insurance. However, there are silver linings amongst the grey clouds. Many adviser firms are reporting increased demand for advice in the areas of pensions and retirement planning, investments and wealth management. Merger and acquisition activity is also helping some firms to diversify into new areas and strengthen their capital bases.

This report explores these issues in detail. It examines the impact of changing regulation and market conditions on the advice market by drawing on a range of trade, consumer and desk research. The report also presents the findings of Mintel’s independent consumer survey, supported by online focus group research.

Key report issues

Retail Distribution Review – what is proposed and how will the new regime impact on the market?

How have the main advice sectors performed recently, and which product areas are in and out of favour?

How has the financial crisis impacted on the advice market, and has it altered people’s perceptions of the banks and advisers?

What is the structure of the market and who are the leading players?

What other advice sources do financial advisers compete with?

Which subject areas have consumers previously sought expert advice on and which areas are they most likely to seek advice on in the future?

What do consumers think about taking, and paying for, professional financial advice?