The Retail Distribution Review has almost decimated the number of experienced approved persons across the industry since 2008, research has found.
Data from Imas Corporate Finance, based on the number of approved persons on the FSA register, showed a huge drop across the advisory, banking and life and pensions industries since the regulator began publishing feedback and consultations on the RDR.
Olly Laughton-Scott, founder of Imas, said: “Any significant drop has to be concerning for the financial services industry.”
According to Mr Laughton-Scott, since the FSA published its first feedback statement on the RDR in January 2008, the number of APs in the investment distribution category has fallen 14 per cent from 31,375 to 26,702 in January this year.
The figures reveal a stark disparity in the trend of AP numbers at IFA networks compared to IFA businesses. Between December 2011 and the RDR deadline of December last year, the number of APs in IFA networks fell 15.1 per cent to 9,661, while those in IFA businesses fell just 0.6 per cent to 17,314.
APs in the investment product category, encompassing life and mutual companies, fell 13 per cent, from 1,782 to 1,540 between January 2008 and January 2013. In the lending risk category, which includes APs at building societies, credit unions and retail banks, the numbers fell 17 per cent from 43,912 to 36,137 in the same period.
The data also showed the number of APs at Coutts & Co in December 2012 was 305, down 38.3 per cent year on year.
A spokesman said this was due to a restructure of the business with a split between wealth managers, who need FSA approval, and private bankers, who require qualifications but not FSA approval.
Lloyds Banking Group brands of Lloyds TSB and Halifax Bank of Scotland, recorded a drop of 17 per cent and 62.2 per cent respectively.
A spokesman for the lender said: “From November 2012 we ceased offering an investment advice service for customers who hold less than £100,000 in savings and investments. Bancassurance remains part of our overall strategy to become the best bank for customers.
“This decision has brought about a change in the number of APs in the group. As a result of the renewed focus, our financial advisers have been offered new roles within the business. There have been no compulsory redundancies.”
Meanwhile, Russell Warwick, distribution change director for Prudential, said it will take a long time for charges to adjust as consumers begin to understand the different services and value they can get from all types of advice.
He said: “Over the next two to four years there will be a period of normalisation and downward net pressure on charges”, adding there was a need for guidance for the mass market.