The vast majority of advice firms saw an increase in turnover in 2024, but energy levels across the industry were low, according to the lang cat’s latest State of the Advice Nation.
Four fifths (80%) of firms reported increased turnover last year, with 68% also anticipating higher profits for the year ahead, an increase of around 50% compared to last year and the most positive outlook since 2021.
Despite this, the lang cat said the report found energy levels are low among the profession, with regulation continuing to be a burden on advisers. More than one in three (31%) business owners said regulation keeps them awake at night, with a general consensus that there is too much regulation and it is becoming too hard to keep on track. Their second major concern is staffing and finding the right people to join their business (15%).
Advisers also expressed frustration at the lack of progress spanning all the Consumer Duty outcomes, with over 20% rating overall progress as a ‘waste of time’. This figure jumped to over 40% for the Customer Support outcome, where firms should monitor if customers feel they’re getting the support they need.
More generally, 29% of advice firms say provider inefficiencies present the biggest challenge to their work, with respondents emphasising the need for more support on issues such as pension transfers and Letters of Authority.
For the first time, the annual report included the views of those new to the profession, with 41% stating that the main driving force behind their career choice is the opportunity to help people, while 31% expressed an interest in the subject itself and the same percentage said they were attracted by the clear career path available. However, nearly two thirds (62%) expressed surprise at the regulation and bureaucracy involved.
Meanwhile, 46% of paraplanners interviewed cited provider admin as the biggest challenge to them getting on with their day-to-day work.
The report also showed that the trend for consolidation continues at pace, with more than 30 firms actively acquiring businesses nationwide. One in six (15%) owners expect to sell to a consolidator within the next five years, with the number rising to one in four for those nearing retirement.
Steven Nelson, insights director at the lang cat, said: “We’ve had a 25% jump in response rates compared to last year and it’s incredibly encouraging to see more paraplanners and newcomers to the advice profession participating, enabling us to capture voices from right across the profession.
“While the industry outlook is positive, the growing burden of regulation is clearly taking its toll, as well as managing the day-to-day demands of running a successful and profitable business. But firms are open to regulation having a meaningful impact in the right areas, with the majority looking for a more proportionate approach that they believe could positively affect client service or fee levels.”
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