At the Consumer Duty Alliance Conference Manchester, Nick Hulme, FCA’s Head of Department for Advisers, Wealth & Pensions Supervision, highlighted that the regulator sees their 2025 advice market survey as serving a dual purpose: supporting the regulator’s supervision and policy work, while also enabling firms themselves to benchmark their business models, advice processes and outcomes against peers of a similar size and profile.
Key Findings:
Market structure and consolidation
- Ongoing consolidation across advice firms and networks
The market continues to shift towards larger, better-capitalised firms and consolidators. Smaller IFAs are either exiting or joining networks to manage regulatory overhead and cost pressures.
- Economies of scale becoming critical
Compliance, reporting, and Consumer Duty requirements are driving fixed cost increases, favouring firms that can spread these costs across larger client bases.
- Impact on competition and consumer access
Consolidation may improve operational resilience but risks reducing localised, independent advice availability—particularly for lower-value clients.
Client engagement and advice suitability
- Shift towards ongoing service models
Firms are increasingly focusing on recurring advice relationships rather than transactional models, aligning with Consumer Duty expectations on delivering ongoing value.
- Suitability under greater scrutiny
The FCA highlights inconsistencies in how firms evidence suitability, particularly around client objectives, risk profiling, and periodic reviews.
- Engagement gaps remain
A significant proportion of consumers still do not seek advice, often due to cost, perceived complexity, or lack of trust—reinforcing the advice/guidance boundary challenge.
Technology, data and innovation
- Increased adoption of RegTech and automation
Firms are investing in tools to automate file reviews, compliance monitoring, and reporting—moving away from manual and spreadsheet-based processes.
- Data quality and accessibility are key constraints
Many firms struggle with fragmented systems and inconsistent data, limiting their ability to produce robust MI and evidence Consumer Duty outcomes.
- AI and digital advice emerging but uneven
Innovation is progressing, but adoption is inconsistent across the market, with larger firms leading and smaller firms lagging.
Vulnerable customer support
- Improved awareness but inconsistent execution
Firms recognise vulnerability requirements, but identification, recording, and tailored support remain uneven in practice.
- Need for better data capture and monitoring
The FCA expects firms to systematically track vulnerability characteristics and outcomes, not rely on ad hoc adviser judgement.
- Outcome testing remains weak
Many firms cannot clearly evidence that vulnerable customers are receiving consistently good outcomes.
Workforce demographics
- Ageing adviser population
A significant proportion of advisers are approaching retirement, creating succession and capacity challenges.
- Barriers to new entrants
Qualification requirements, cost, and perceived career complexity are limiting inflows of younger advisers.
- Skills shift towards hybrid roles
Future advisers will require a blend of technical, regulatory, and digital/data capability to operate effectively in a more automated environment.
Overall summary
The advice market is becoming more consolidated, data-driven, and outcome-focused. The regulatory direction from the Financial Conduct Authority is clear: firms must evidence suitability, demonstrate value, and operationalise Consumer Duty through robust data, systems, and controls. Technology is no longer optional—it is becoming the primary mechanism through which firms achieve scalable compliance and maintain commercial viability.
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