A new report, based on FCA Register data, has revealed that 7,860 firms deauthorised from the FCA Register in the last eight months. 

The 'Landscape Report' reveals a continued decline in the number of financial services firms, with a 2.8% fall to 70,131 over the past eight months.

The number of unique individuals dropped, by 1.4% to 220,679.

The Landscape Report is produced by data solutions business Autus which was acquired by ISS MI in July. It draws on FCA Register data to unravel metrics and trends in the UK financial services sector.

The majority of deauthorised operated in credit broking but 521 offered investment advice and 285 were in mortgage advice.

In the investment advice space, the report shows that most firms still prefer to offer independent, rather than restricted, advice. The number of restricted firms has dropped by over 25% from 848 in 2016 to 632 in 2023.

ISS MI says that given the relatively stable number of individuals on the Register the figures point overall to smaller firms consolidating into larger entities, “in pursuit of economies of scale.”

A more positive trend was that 4,402 firms joined the Register during the last eight months, making the net number of firms departing exiting the Register 3,458. Of the 4,402 firms which joined the Register, 442 offer investment advice and 409 provide mortgage advice.

The analysis of the Register also found considerable movement of individuals since the start of the year with more than 3,100 individuals moving jobs. Most moved to similar types of firms, with 828 individuals transitioning from one investment advice firm to another. Additionally, 570 advisers moved between mortgage advice firms. 

ISS said that looking in more detail at the 30 largest investment advice and mortgage advice firms, in terms of client-facing advisers, the report showed a mixed bag. The number of firms increasing their adviser headcount was almost equal to those reducing them. 

Wealth manager St James’s Place (SJP) led the adviser headcount table and added 43 advisers in the last eight months. Openwork, with almost half as many advisers, slightly reduced its adviser headcount. Quilter Financial Services Limited experienced a particularly dramatic increase over the period, adding 837 advisers. 

True Potential saw a further small decrease in adviser numbers in the period, a contrast with its previous expansions, while 2 Plan increased their adviser headcount by a small amount. 

Source ISS MI /Autus. Using FCA Register data.

• The Landscape Report is produced by ISS Market Intelligence.