The number of directly authorised intermediary firms and advisers operating in the retail advice space across both wealth and mortgages has shrunk over the past five years.
A Freedom of Information request to the Financial Conduct Authority by Network Consulting found that between 2020 and 2025, the total number of DA retail advice firms operating in mortgages only, wealth only, or both areas has fallen by 17.2% – a loss of 1,853 firms.
Firms intermediating in both wealth and mortgages have seen the steepest decline, down 24.4%, while wealth-only firms have also fallen sharply by 19.4%. In contrast, mortgage-only firms have remained resilient, growing by 11% between 2020 and 2025.
Reflecting the firm-level trends, the FOI data showed mortgage adviser numbers have remained relatively stable, increasing by around 2% since 2021. Wealth adviser numbers, however, have fallen by 1,333 advisers, a decline of 12.5% over the same period.
Rosemount Financial Solutions said there were several driving factors behind the decline, including adviser retirement and some advisers transitioning to appointed representative status, seeking the regulatory umbrella provided by networks.
The firm said this shift is reinforced by the FCA’s response to Network Consulting’s request on DA application approvals in January 2025, which showed a 75% decline in approvals between 2020 and 2024.
In comparison, the number of AR firms is up 0.03% and adviser headcount has increased 1.7%, according to the Network Consulting league tables which have been published since 2022.
Ahmed Bawa, CEO of Rosemount Financial Solutions, said: “We have seen increased interest from DA advisers in recent months, and it’s easy to understand why. The compliance requirements faced by advisers continues to increase, taking up more time the adviser could devote towards doing what they do best – helping their clients secure their long-term financial future.
“Similarly, the operational and technological support on offer by adopting the AR route opens up new opportunities for advisers, allowing them to be more proactive and strategic in building their own business. It’s a trend that I would expect to see continue in 2026 and beyond as the benefits of working within a network become even clearer.”
Bawa said networks need to ensure that the transition from DA to AR is made as “smooth and straightforward” as possible, while ensuring advisers receive personalised, bespoke support.
“Just as all clients are unique, so too are advice firms, and networks have a duty to deliver a tailored support package based on their individual needs and aspirations,” Bawa added.
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