It’s a question that many people frequently ask and it’s one that FT Adviser, the FT’s specialist publication for the advisory profession, addresses, with the help of Matrix Solutions, in its annual rankings of the Top 100 Advisers.
Firms are ranked according to which attract the most business, the number of advisers they employ and the length of time they have been helping savers with their investments, plus an estimated performance based on asset growth.
In addition to the FT Adviser rankings, here are my own tips for those seeking financial advice.
As far as the Financial Conduct Authority (FCA) is concerned, financial advice has to be provided by a qualified professional and comes with a recommendation tailored to your circumstances. This means it will come with the protections bestowed by the Financial Ombudsman Service and the Financial Services Compensation Scheme.
The failed Woodford Equity Income fund was featured on Hargreaves Lansdown’s “Wealth 50” best-buy list until the day of its suspension, but those investors who bought in because of this had not been “advised” to buy it, as far as the regulatory definition is concerned. This has not deterred law firm Leigh Day from seeking potential legal redress; it says it has been contacted by over 500 investors.
The situation is further confused by the fact that Hargreaves Lansdown employs around 90 financial advisers who, for a fee, can provide regulated advice to customers.
Advisers can afford to be picky
The financial advice profession has come a long way in recent years. The Retail Distribution Review, introduced in 2013, banned commission and required advisers to have more stringent qualifications. As a result, the number of financial advisers has fallen from more than 40,000 to 26,000.
The lack of supply, combined with the fact that you have to pay for it yourself, has created an “advice gap” of people who can no longer access an adviser.
This has been compounded by 2015’s pension freedom reforms. Those with large pension pots face an array of options. They need to make an informed decision, and receiving regulated advice is commonly a requirement.
As a consequence, many advisers don’t have to do very much to get new business. Some are perfectly happy to continue with their existing clients or simply rely on referrals arising from them.
If you’re looking for an adviser, a referral from a friend or family member is one route. Another is to use an online directory such as Unbiased. But it is worth remembering that it doesn’t cover the whole market — advisers have to pay to appear on Unbiased.
Many advisers will be the most interested in helping people manage their finances and investments on an ongoing basis, rather than assisting with a one-off transaction. But persevere and you will find one who can help you.
Not all advice is created equal
You must understand what sort of advice firm you are dealing with, because this could impact where your money is invested and how much you pay.
The key question is — are they independent or restricted? Independent advisers offer the full range of financial products and providers across the whole market. Restricted ones do not.
Restricted advice does not necessarily have to be a bad thing: for example some advisers may decide there are some obscure products their clients are unlikely to ever need, so they restrict themselves.
Other restricted advisers only offer products from certain providers. This can be because they are — and apologies for this bit of jargon — vertically integrated.
This usually means they are part of a bigger company which owns an advice business alongside an investment platform and a fund management company. Quilter and Aberdeen Standard Life’s 1825 are both examples of this.
The supposed advantage of vertical integration is that the advice you receive will be cheaper (because these companies can leverage their scale) and safer (because you will only ever be recommended a centrally-approved product).
Yet critics of vertical integration say that because the advisory and platform part of such businesses often struggle to make money, the funds have to “pick up the slack”. As Mark Polson of the Lang Cat consultancy told me recently, this could mean clients end up paying higher charges.
How much should you expect to pay?
A percentage charge levied on your investments — sometimes called ad valorem — is overwhelmingly the most common charging structure. More than 4,000 firms use this structure according to the FCA, while around 1,100 charge by the hour.
Analysis by the Lang Cat that shows most advisers tend to charge between 1 per cent and 0.75 per cent.
St James’s Place charges 0.5 per cent for advice on an ongoing basis — on top of its 4.5 per cent charge on a customer’s initial investment. SJP attracts a lot of criticism, but being expensive has not stopped its growth. Just as you could save a fortune by buying your groceries in Aldi, some people prefer to shop in Waitrose.
The main problem that advisers need to address is the clarity and transparency of their fee structure.
I’ll leave you with some good news. If you are seeking financial advice today, you will probably be dealing with a better qualified, more professional person than you would before 2013. Many advisers now aspire to become chartered to demonstrate their professionalism. And for consumers, things are likely to get better.
Recent reforms mean advisers now have to tell you exactly how much — in pounds and pence — they will charge you and what for.
Hopefully these tips will help you find the right person to get the financial help you need.
Rank | Rank in 2018 | Company | CF30s | Assets under management in retail investment funds 2019 (£m) |
1 | 6 | Quilter plc | 25 or more | 37,000 |
2 | 37 | Close Brothers Group | 25 or more | 570 |
3 | 26 | Grant Thornton UK LLP | 25 or more | 1,100 |
4 | 5 | Wilfred T Fry (Personal Financial Planning) Ltd | 14 to 24 | 810 |
5 | 3 | Mazars Financial Planning Group | 14 to 24 | 1100 |
6 | N/A | Charles Stanley Group | 25 or more | 1100 |
7 | N/A | Progeny Wealth Ltd | 25 or more | 800 |
8 | 20 | St James's Place Wealth Management plc | 25 or more | 110,000 |
9 | 1 | Tenet Group | 25 or more | 5,800 |
10 | 41 | LEBC Group Ltd | 25 or more | 1,600 |
11 | 70 | Openwork Group | 25 or more | 9,800 |
12 | N/A | Bartlett Wealth Management Ltd | 07 to 13 | 230 |
13 | N/A | Hazlewoods Financial Planning LLP | 0 to 6 | 260 |
14 | 10 | The Tavistock Investments Group | 25 or more | 1,400 |
15 | 57 | Cullen Wealth Ltd | 14 to 24 | 800 |
16 | 55 | Punter Southall Group | 25 or more | 3,100 |
17 | N/A | Equilibrium Group | 07 to 13 | 1,100 |
18 | N/A | Marsh Commercial | 25 or more | 2,600 |
19 | 54 | Ludlow Wealth Management Group | 07 to 13 | 1,100 |
20 | 18 | Westminster Wealth Management LLP | 25 or more | 410 |
21 | 27 | HFMC Wealth | 25 or more | 270 |
22 | 25 | Paradigm Norton Financial Planning Ltd | 14 to 24 | 550 |
23 | 9 | Foster Denovo Group | 25 or more | 1,700 |
24 | 73 | Smith & Pinching Financial Services Ltd | 14 to 24 | 410 |
25 | N/A | Premier Benefit Solutions Ltd | 14 to 24 | 490 |
26 | N/A | Lycetts Financial Services Ltd | 07 to 13 | 220 |
27 | 68 | Skipton Group | 0 to 6 | 3,600 |
28 | 15 | PI Financial Ltd | 25 or more | 590 |
29 | N/A | Barnett Waddingham Group | 25 or more | 280 |
30 | 32 | Perspective Group | 25 or more | 1,300 |
31 | N/A | Antrams Financial Services | 07 to 13 | 280 |
32 | 34 | Validpath Ltd | 25 or more | 510 |
33 | N/A | Brooks Macdonald Group | 25 or more | 560 |
34 | 2 | JLT Group | 25 or more | 1,600 |
35 | 45 | AWD Chase de Vere | 25 or more | 5,300 |
36 | N/A | Clark Gillone | 07 to 13 | 460 |
37 | 61 | Wren Sterling Group | 25 or more | 1,100 |
38 | 28 | HSBC Bank Group | 25 or more | 9,000 |
39 | 4 | Kerr Henderson Group | 14 to 24 | 750 |
40 | 12 | Beckett Investment Management Group | 14 to 24 | 560 |
41 | 44 | InPartnership | 25 or more | 3,000 |
42 | 49 | Argyle Consulting Ltd | 07 to 13 | 470 |
43 | N/A | Ellis Bates Group | 25 or more | 160 |
44 | 63 | Sense Network Ltd | 25 or more | 2,600 |
45 | 21 | Harwood Wealth Management Group | 25 or more | 2,100 |
46 | 80 | N W Brown & Co Ltd | 14 to 24 | 520 |
47 | 8 | Brewin Dolphin Ltd | 25 or more | 11,000 |
48 | 65 | Advanta Wealth Ltd | 14 to 24 | 340 |
49 | 48 | Central Investment Services (Scotland) Ltd | 07 to 13 | 580 |
50 | 38 | Smith & Williamson Group | 25 or more | 3900 |
51 | N/A | A & J Wealth Management Ltd | 07 to 13 | 300 |
52 | 43 | Lloyds Banking Group | 25 or more | 18,000 |
53 | 31 | Joseph R Lamb Independent Financial Advisers Ltd | 07 to 13 | 280 |
54 | N/A | Broadstone Group | 14 to 24 | 380 |
55 | 67 | Sanlam Financial Services Group | 25 or more | 2,400 |
56 | 51 | Tilney Group | 25 or more | 7,400 |
57 | 90 | Skerritt Consultants Ltd | 14 to 24 | 350 |
58 | N/A | Mattioli Woods Group | 25 or more | 970 |
59 | 96 | Wills & Trusts IFP Ltd | 07 to 13 | 92 |
60 | 82 | Clairville York Ltd | 0 to 6 | 220 |
61 | 64 | Barclays Group | 25 or more | 4,600 |
62 | 42 | Lumin Wealth Management Ltd | 07 to 13 | 400 |
63 | 69 | HFS Group | 14 to 24 | 390 |
64 | 35 | Hoyl Group | 25 or more | 460 |
65 | N/A | The Private Office Ltd | 25 or more | 1100 |
66 | N/A | Schofield Money Ltd | 0 to 6 | 180 |
67 | 40 | UBS Group | 25 or more | 1,400 |
68 | N/A | Keyte Ltd | 0 to 6 | 120 |
69 | 11 | Wingate Group | 07 to 13 | 340 |
70 | N/A | Murdoch Asset Management Ltd | 0 to 6 | 130 |
71 | 62 | Pannells Financial Planning Ltd | 14 to 24 | 520 |
72 | 17 | Lovewell Blake Group | 07 to 13 | 260 |
73 | N/A | Timothy James & Partners Ltd | 14 to 24 | 610 |
74 | 22 | Ring Associates Ltd | 07 to 13 | 350 |
75 | 17 | Lighthouse Group | 25 or more | 3,300 |
76 | N/A | Lifetime Financial Management Intermediaries Ltd | 07 to 13 | 25 |
77 | 66 | Attivo Group | 14 to 24 | 370 |
78 | 84 | Lomond Financial Management Group Ltd | 07 to 13 | 190 |
79 | N/A | KBL Group | 0 to 6 | 1,400 |
80 | N/A | Sacre Associates LLP | 07 to 13 | 470 |
81 | 33 | Fairstone Group | 25 or more | 4,100 |
82 | 24 | Canaccord Genuity Group | 25 or more | 940 |
83 | N/A | AFWM Ltd | 0 to 6 | 120 |
84 | N/A | Mutual Financial Management LLP | 07 to 13 | 59 |
85 | 75 | Loveday & Partners Ltd | 14 to 24 | 480 |
86 | 74 | Hargreaves Lansdown Group | 25 or more | 33,000 |
87 | 39 | Best Practice IFA Group Ltd | 25 or more | 2,800 |
88 | N/A | Reeves Independent | 0 to 6 | 60 |
89 | N/A | Francis Clark Financial Planning Ltd | 14 to 24 | 410 |
90 | 30 | Succession | 25 or more | 5,900 |
91 | N/A | Hugh Davies Associates Ltd | 0 to 6 | 82 |
92 | N/A | Martin Aitken Financial Services Ltd | 0 to 6 | 210 |
93 | N/A | Ascot Lloyd Group | 25 or more | 2,800 |
94 | N/A | Origen Financial Services Ltd | 25 or more | 1,400 |
95 | N/A | Furnley House Group | 07 to 13 | 100 |
96 | N/A | Edison Wealth Management Ltd | 0 to 6 | 120 |
97 | 85 | Investec Group | 25 or more | 8,200 |
98 | N/A | Alan Steel (Asset Management) Ltd | 07 to 13 | 1,100 |
99 | N/A | Pinnacle Financial Planning Ltd | 14 to 24 | 330 |
100 | N/A | RBS Group | 0 to 6 | 3,900 |
The list includes only firms whose primary business (i.e. majority of sales) is classified by Matrix Solutions as financial advisers, wealth managers and banks are included. | ||||
Individual firms that are affiliated with a wider group are included within the figures for the wider group and appointed representatives are included within the figures for their principal, regardless of whether they could appear individually. | ||||
The figures for the list have been rounded up and include assets invested in retail investments and pensions, reported to Matrix Solutions by our Financial Clarity partners, other assets, such as those invested in discretionary funds or portfolios, hedge funds etc. are not included. | ||||
Matrix Solutions receives data directly from fund managers covering 90 per cent of the UK retail investment market into their Financial Clarity product. Fund manager data is further supplemented and enhanced with platform feeds. The top 25 fund managers account for 80 per cent of retail assets under management and Matrix Solutions received sales data from 22 of these investment houses. Sixteen platforms submit data to Matrix Solutions, including 15 at fund and intermediary level. High platform coverage provides visibility of platform sales from fund managers not currently contributing directly to Financial Clarity. | ||||
CF30 numbers may include qualified staff who are actively advising customers. Certain firms no longer have CF30’s registered against them following a change in the regulatory regime in March 2016. | ||||
Matrix is an ISS Market Intelligence company. |
Damian Fantato is the deputy editor of IC sister title FT Adviser