A recent FOI by FT Adviser revealed the number of firms authorised to provide retail investment advice has fallen from 6,240 in August 2022 to 5,805 as at February 2024.
This means 435 firms have disappeared from the market, representing a drop of 7 per cent in as little as 18 months.
But taking a closer look at the adviser numbers, FT Adviser found while the number of young advisers has diminished in the past 18 months, the number of older advisers has grown. So what does this mean for the advice profession?
Appearing on the FT Adviser podcast, Keith Richards, CEO of the Consumer Duty Alliance, said there was not a huge concern about the number of firms dropping but the bigger issue was when you start to see a significant drop in adviser numbers.
He said: "The problem is if we're not managing to attract new talent quick enough to fill the gap, and that's what the statistics could well be telling us at the moment given the amount of firms that have chosen to consolidate."
FT Adviser revealed that as of February 2024 there were 174 advisers authorised to provide retail investment advice under the age of 25.
This was a significant drop of 60 per cent from August 2022, when FT Adviser found there were 426 retail advisers aged below 25.
Meanwhile the number of advisers aged over 60 has grown from 4,824 in August 2022 to 6,210 in February 2024, a jump of 29 per cent.
Also appearing on the podcast, Mark Ormston, director of propositions and corporate partnerships at Retirement Line, said the profession needed to engage with those in the younger age brackets as they will be the people that attract more people of their own age.
He said: "We really need to lean in to these young professionals and make sure they're comfortable in their careers, and then they can advocate for the profession itself."
He added that to attract young advisers, the profession had to work collaboratively.
"If we leave it to the large networks, we may well find that we're not getting the full results that we're trying to achieve," he said.
"It's not just attracting that attention from those candidates from the outset, which is a very positive first step, but then we also have to look at the retention figures."
Richards added if each advice firm decided to take on a personal initiative to either go into a school or university, it could have a profound impact on raising awareness of a career in advice.
He said: "We're going to see more emerge from a revised apprenticeship programme and that's really key, because it's not just about those coming out of university, it's those that are actually coming out of secondary education who don't go to university.
"They can get a degree by joining a sector that is [a] recognised profession and allows them to carry on up to, for example, chartered status, which means they can achieve their degree in the workplace."