Understanding the advice market: financial advice firms survey 2025

The survey shows that the advice sector is stable but with room for growth.

Although the number of authorised firms has fallen by 15% since 2021, adviser numbers have remained steady at around 31,000. 

Large advice groups, those with over 50 advisers, just 1% of firms, provide advice on half of all client assets, while a long tail of smaller firms continue to serve a wide and diverse client base.

Consolidation continues to reshape the market, and around a third of the largest firms are looking to acquire another firm or its client bank in the next 2 years. 

Consolidation has not reduced access to advice. It can support retiring financial advisers who want to ensure their clients continue to benefit from advice. The strong resource behind most consolidating firms can support a smooth transition that results in good client outcomes. 

Well-managed acquisition and integration can create real value for clients, employees, buyers and sellers of regulated entities. Where groups seek to grow quickly through acquisition, resourcing must keep pace with the group’s increasing scale and complexity. 

Where integration has been poorly managed and resourcing has not kept pace with growth, we have seen harm to businesses and their clients.

We know that small firms (with 1-5 advisers) continue to play a vital role, particularly in local communities, where they often provide highly personalised, relationship-based advice and trusted long-term support. 

Many small firms plan to grow over the next 2 years, with 18% planning or considering plans to increase revenue by more than 25%, and 13% planning or considering increasing their client base by 25% or more particularly in regions with strong local demand. 

Firms across the market make extensive use of third party support. Use of third-party providers is particularly high for compliance and monitoring activity and is also common for paraplanning/investment research and client due diligence. 

The use of third party providers is particularly important to small firms, with a much lower percentage (31%) employing paraplanners compared to 77% of medium-sized and 89% of large firms. There is however a large percentage of small firms (36%) that do not employ or use third party paraplanners, compared to 9% of medium-sized and 4% of large firms.

Paraplanning

Compliance and client due diligence

Reported staffing levels for firms responding to the survey also show the scale of paraplanning and support roles alongside employed advisers.

Table 1: Numbers employed at firms that responded to the survey

* We extracted Financial Adviser numbers from the FS Register. 

We know from the FS register, there has been a 15% reduction in firm numbers between 2021 and 2025.

Table 2: All firms able to provide advice to clients - trend from 2021 to 2025

We also asked firms about their future growth and contraction plans over the next two years.  The analysis of these responses alongside recent trends in newly authorised firms suggests a further reduction in the number of firms of 5% is likely by 2028. There is no evidence though to suggest there will be a reduction in the number of financial advisers. 

Future plans

Table 3: Percentage of firms responding yes and considering to each option

This regional map provides a snapshot of these differences across regions. It is designed to help firms see the context in which they operate, and to consider how local conditions may shape service models and growth plans.

At a regional level, demand for advice is driven by differences in demographics and employment patterns such as self-employment and public sector employment rates. High rates of public sector employment with defined benefit pensions may dampen demand, while high rates of self-employment may increase it.

Regional growth maps for small firms

Assets under Advice (AuA) analysis - market share

The need for better support is clear. Our Financial Lives survey[4] has consistently shown that only around 9% of consumers take financial advice - just 4.6m. It also shows around 7 million adults in the UK hold £10,000 or more in cash savings and could be missing out on the long-term benefits of investing. This highlights an advice gap and unmet demand. 

We have looked at the UK population across the 12 regions (as defined by the ONS) and its relative wealth alongside factors that may drive or drag on the demand for financial advice. 

Overlaying ONS regional data on adviser location suggests there may be a demand for advice in the segment where prospective clients hold £100k investable assets. 

We asked if firms would consider offering simplified advice, as proposed in the DP23/5 Advice Guidance Boundary Review Policy Paper[3]. Our survey found nearly one third of all firms, and three fifths of large firms were considering this. We want to see more people getting support and a market that innovates to offer a range of services to meet differing client needs. The updated proposals in our consultation[4] on simplifying the pensions and investment advice rules are designed to support this. 

Meeting clients face-to-face remains important, with 99% of firms meeting clients in person. But firms are also using technology, and many are considering using artificial intelligence (AI). 

Firms are exploring AI in three main areas: supporting client engagement, strengthening compliance and risk monitoring, and improving operational efficiency through automation (for example, for meeting notes, data extraction and analysis). 

While interest is broad, fewer firms report they will deploy AI within advice processes in the near term (around 14% of small firms and 38% of medium‑sized firms, rising to just over half of large firms). This suggests that for many firms—particularly smaller ones—AI is still at an exploratory stage. 

Where there is interest, it is concentrated among larger firms: when we also include firms who reported they might consider using AI in the advice process, 95% of large firms and 81% of medium‑sized firms are either using AI in the advice process or considering it, compared with 48% of small firms. 

Future plans

Table 4: Percentage of firms responding yes and considering to each option

The same pattern appears in client‑facing digital capability. 65% of large firms have or are considering a mobile app and 78% a client portal website, compared with 31% and 49% of small firms. These differences are likely driven by scale, investment capacity and access to IT expertise. For firms with more relationship‑led models, the business case for client‑facing platforms may also be more selective.

External evidence suggests client expectations for digital service are increasing. The Mintel Customer Service in Financial Services Report 2025 highlights a significant shift in consumer expectations as online services mature, reporting that 55% of consumers would only choose a provider that offers 24/7 support.

Table 5: How firms interact with their clients 

Firms may be exploring investment in digital tools and platforms to support greater efficiency and adviser capacity, enable multi-channel engagement, and appeal to younger, more digitally enabled clients. 

Digital capability is likely to become a key differentiator across the sector. For mid-sized and large firms, investment in technology may already be helping to improve efficiency and scale. 

For smaller firms, digital tools and AI may offer opportunities to enhance productivity, support scalable growth and strengthen client relationships –particularly where firms can access shared solutions, partnerships or network-based support. 

As innovation accelerates, existing regulatory expectations, including the Consumer Duty, continue to apply. 

Used well, technology and AI may present a significant opportunity for firms of all sizes to grow sustainably, reach more consumers and enhance client outcomes, while preserving the personalised advice that remains central to the profession.

The survey highlights gender and age differences in the adviser population, alongside clear opportunities to strengthen future capacity and align the profession with a changing client base. 

Women currently account for around 18% of financial advisers, and over half (51%) of multi-adviser firms do not have any women in adviser roles. 

This contrasts with the client base, where women represent a substantial share of demand: around 29% of advised clients are women and a further 31% receive advice jointly with a partner.

Our analysis of existing FCA data provides insight into the age profile of the profession. 

The average adviser is in their late 40s, reflecting a well-established and experienced workforce. This reinforces the importance of effective succession planning and structured early career pathways to support sustainable growth, as experienced advisers retire over time. 

Many small firms operate as family businesses, meaning succession planning is commonly informal and based on passing ownership and control to the next generation.

Consolidation supports retiring financial advisers who want to ensure their clients continue to benefit from receiving financial advice. 

There are encouraging signs of progress. Larger firms, in particular, have invested in structured training and ‘academy’ programmes, contributing to growth in the number of advisers in their 30s, with a 12% increase in advisers aged 30-39 seen in the data we hold on financial advisers from 2023 to 2025. 

Among advisers under 50, around one in five are women, compared with roughly one in ten amongst those aged 50 and over. While representation remains lower across both groups, it appears to be increasing among younger advisers.

Women are well-represented in paraplanning (48%) and support roles (66%), highlighting a strong foundation of skills and experience within the sector. 

As firms adapt their talent strategies, the larger proportion of female advisers under 50 suggests they are likely to play a bigger role in shaping the future advice workforce.

Pensions and retirement income advice remain central to the UK advice market, representing the majority of advice activity and some of the most complex consumer decisions. 

Retirement is the primary objective for 69% of all advice firms’ retail clients. This includes retirement saving, pension consolidation, or accessing pensions at or near retirement. 

This aligns with demographic realities: client bases are dominated by individuals aged 45+, and the shift from DB to DC pensions is driving a structural need for ongoing support. 

As more consumers transition from saving to drawing down their pensions, advisers have a critical role in helping clients manage sustainability of income, investment risk and longevity. 

In terms of clients’ other primary goals, saving for other objectives accounts for 23%, while objectives such as inheritance tax (IHT) planning (5%) and debt repayment (3%) remain specialist areas at much lower levels. 

We also found that large firms reported that they’re providing less advice (3%) on IHT than medium and small firms (8%).

Retirement focus

Table 6: Primary objective for advice firms’ retail clients

The survey also shows firms are engaging with these challenges, particularly following our 2024 Retirement Income Advice Review[5].

Following the Review, firms have already made, are implementing, or considering changes following reviewing their approach to calculating sustainability of income (75%), control frameworks and management information (66%) record-keeping (57%), periodic reviews of sustainability (56%), fact-finding (54%) and. risk profiling (49%).

Table 7: Changes since the retirement income advice publication 

Firms that responded yes/implementing/considering

Ensuring that advice is suitable and in the client’s best interests is a core element of helping consumers navigate their financial lives.

The survey shows widespread adoption of established tools and processes for key aspects of advice, including risk profiling and assessing clients’ capacity for loss. 

Around 80% of firms use external risk profiling questionnaires as part of their methods for assessing a client’s ability to bear investment losses. This indicates that the principles underpinning robust suitability assessments are well understood across the sector.

The survey showed that compliance oversight and assurance can vary. Firms reported reviewing around 30% of initial and replacement advice files and around 20% of ongoing advice files, with some conducting no internal or third party reviews for certain advice types. 

Whether carried out internally or through third-party providers, reviews should meaningfully test the suitability of advice. Across firms of all sizes, sampling and review frameworks should be robust and risk-based to ensure advice remains suitable, fair, and aligned with Consumer Duty expectations.

Large firms (27%) were also more likely to have advised on higher risk or non-mass-market investments to retail clients than small (2%) or medium firms (5%). This could reflect their broader and more diverse client bases, access to specialist investment propositions, or greater product governance capacity.

Ongoing advice forms the backbone of the advice model, with around 90% of clients being placed into these arrangements.

Table 8: Service profile of active retail clients – by age bracket 

We also found female clients are 15% more likely to receive ongoing advice services.

Oversight of ongoing services varies. Large firms, on average, reported reviewing a smaller proportion of ongoing advice files than small firms. While this may reflect the challenges of overseeing large adviser populations, it also increases the risk that weaknesses in ongoing services go undetected. 

Assurance activity is a critical control, with the survey finding that there is scope for some firms to strengthen coverage. Alongside increasing file review rates, firms may benefit from improving how they test service delivery and use management information to monitor outcomes, as well as identifying emerging risks earlier. Getting these fundamentals right is one of the most effective ways firms can strengthen client outcomes and support sustainable advice models.

We found that 8% of small firms did not undertake reviews of initial advice - the corresponding figures were 19% for ongoing advice and 22% for replacement business.  

In March, we published our consultation[9] on simplifying the pensions and investment advice rules. We want to encourage firms to offer a range of services to meet different clients’ needs. We are proposing to simplify our ongoing advice rules that may be overly prescriptive. This includes removing the requirement for the suitability review for Markets in Financial Instruments Directive (MiFID) and Insurance Distribution Directive (IDD) business to be at least annual. We seek to leverage existing obligations under the Consumer Duty to achieve flexibility for firms to innovate while ensuring a focus on good outcomes for consumers. Through these changes, we aim to support the development of new business and charging models, such as subscription and retainer models that are priced accordingly to offer fair value.

From our supervision of the sector, we can see a strong correlation between firms that are well-run and have effective arrangements for supporting clients with characteristics of vulnerability, and the delivery of better consumer outcomes. The survey shows around 12% of retail clients are identified as having characteristics of vulnerability, and identification is improving across the sector. 

The survey shows differences in how firms identify and support clients with characteristics of vulnerability. Large firms have governance frameworks and more systematic oversight that may make it easier to identify higher proportions of vulnerable clients (14%), rather than relying on adviser judgement alone.

Smaller firms, by contrast, often report slightly lower identification rates (11%) but notably higher rates of service adjustments for the clients they identify (66% versus 51% for medium-sized and 34% for large firms). 

This may reflect that small firms’ relationship-led models could give advisers close knowledge of long-standing clients. However, fewer documented checks mean signs of vulnerability may be missed or go unrecorded. Some firms report either no vulnerable clients or vulnerable clients with no associated adjustments.

Strengthening documentation, review frameworks proportionate to firm size, and routine checks will help ensure all clients receive appropriate support in line with the Duty’s expectations.