The structure of the UK advice market is changing – and changing quickly.
Over the past two years, the number of advice firms has reduced, with the shift most noticeable among smaller firms. At the same time, the overall number of advisers has remained broadly stable, as new entrants increasingly begin their careers through academy routes within larger organisations.
In other words, consolidation is continuing to reshape the structure of the sector.
I’ ve written and spoken at length about the three key factors I believe will shape the advice sector in 2026: regulation, technology, and consolidation. It’ s this third theme that I want to focus on in this article.
The UK advice sector is undoubtedly strengthened by its diversity, with firms of all sizes and models offering a range of different services to different client groups. For many years, that breadth has meant consumers could access a wide range of advice propositions tailored to their individual circumstances.
However, those demographics are evolving. While this creates challenges, it also reflects a sector in transition – one that is actively investing in its future talent pipeline.
Data from the FCA’ s intermediary market statistics illustrates this clearly. Over the past two years, the total number of advice firms has reduced by around 14 %, with that reduction most heavily weighted towards smaller firms.
Over the past two years, the total number of advice firms has reduced by around 14 %.
At the same time, the adviser population is beginning to shift. The average age of advisers is now 49, slightly lower than it was two and a half years ago. This is largely due to the positive recruitment of new advisers through academy programmes, particularly within larger firms, with the 30 – 39 age group growing as a result.
That influx of new talent is an encouraging sign for the long-term sustainability of the sector. And, while many of these advisers are starting their careers within larger firms, it’ s reasonable to expect that a proportion will, over time, look to establish their own businesses. If so, this could help to rebalance the market and support the next generation of smaller, independent firms.
At the same time, however, there remain some important demographic realities. Around half of the adviser population is now over the age of 50, while there are only 171 advisers in the UK under the age of 25. So, while the average age is gradually reducing, the structural challenge facing the sector is still very real. Before we consider why this matters, it’ s worth looking at some of the factors driving these changes.
As you’ d expect, one is the increasing regulatory burden. Over the past few years, expectations around governance, oversight and management information have increased substantially, particularly following the introduction of the Consumer Duty. For many smaller firms, meeting these expectations can be both operationally and financially challenging.
While the average age is gradually reducing, the structural challenge facing the sector is still very real.
The second factor is the rising cost of running an advice business. Professional indemnity insurance, compliance costs and the need to invest in modern technology platforms all place pressure on margins.
Thirdly, many smaller firms are heavily reliant on one or two key individuals. This creates vulnerability. If an adviser becomes ill, dies or needs to step away from the business unexpectedly, clients can suddenly be left without support and the firm may have limited continuity options.
A fourth issue is that many firms delay succession or exit planning. Without a clear plan in place, the options available become increasingly limited over time.
Finally, the broader trend towards consolidation cannot be ignored. Larger firms are often able to achieve greater scale, efficiency and stronger alignment with regulatory expectations. At the same time, this creates both challenges and opportunities across the market, particularly for firms considering their long-term strategy.
All of these factors together are reshaping the advice landscape.
I’ m sure everyone reading this understands why this matters. Firstly, because consumers benefit from choice. If we believe in personalised advice – and the vast majority of advisers I’ ve spoken to recently very much do – then maintaining a diverse market remains critically important.
July 2026 | 5