The UK Financial Advice Industry in 2026: Challenges, Opportunities, and What’s Ahead
Something doesn’t add up in UK financial advice.
On one side, you have 91% of people who’ve paid for advice saying it helped them manage their money better. On the other, you have 91% of the population not getting any advice at all.
The service works. Almost nobody uses it.
That tension sits at the heart of almost every challenge—and opportunity—facing financial advisers in 2026. Whether it’s regulation, technology, demographics, or business models, the question keeps coming back to the same place: how do you deliver good advice to more people, profitably?
Here’s what the data tells us about where the industry stands and where it’s heading.
Fewer Firms, Stable Adviser Numbers
The UK advice sector has been quietly reshaping itself. Over the past three years, more than 1,000 firms have left the market—a 15.6% drop from around 6,280 firms in early 2022 to roughly 5,300 today.
Yet adviser numbers have held relatively steady at around 27,500. The maths isn’t complicated: smaller firms are being absorbed into larger ones, not disappearing entirely. Walk into any industry event and you’ll hear the same conversations—who’s buying whom, which PE-backed consolidator is most active this quarter, what multiples are being paid.
The ISS Market Intelligence Landscape Report puts it plainly: given stable adviser numbers but declining firm counts, “smaller firms are consolidating into larger entities in pursuit of economies of scale.”
What hasn’t changed is the dominance of small practices. Around 87% of advice firms still have five or fewer advisers. The industry remains a cottage industry in many ways—just one where the cottages are increasingly being bought by property developers.
Advice Gap That Won’t Close
Nine percent.
That’s the proportion of UK adults who received regulated financial advice in the year to May 2024, according to the FCA’s Financial Lives survey. It’s the same figure Lang Cat found when they surveyed consumers about advice taken in the past two years. The number hasn’t moved.
The FCA estimates around 23 million adults are underserved by the advice and guidance market—including 7 million with at least £10,000 in investable assets who could benefit from advice but aren’t getting it.
Why? Three barriers keep coming up.
Cost and perceived value top the list. A third of consumers aren’t convinced advice would save them money. The typical advised client now holds a portfolio of around £411,000—and that figure keeps creeping up. When the economics of advice require clients to have substantial assets before it’s profitable to serve them, a lot of people get left out.
Trust comes second. Nearly a third of consumers say they simply don’t trust advisers enough to pay for their services. Decades of mis-selling scandals, aggressive commission-driven sales, and a general wariness of financial services haven’t been forgotten.
And then there’s awareness. Many people don’t know how to find an adviser, what the process involves, or even that advice is something they might need.
Here’s what makes this frustrating: among those who do pay for advice, satisfaction is high and rising. The service genuinely helps people. The challenge is getting them through the door.
Consumer Duty: Help or Hindrance?
Two years into the Consumer Duty, adviser attitudes have shifted in interesting ways.
On one hand, acceptance has grown. FE fundinfo’s 2025 survey found 52% of advisers now see Consumer Duty as having a positive impact on their business—up from 45% the year before. The requirement to demonstrate fair value and good outcomes has, for many firms, simply codified what they were already doing.
On the other hand, there’s a darker consequence that regulators may not have anticipated.
Half of advice firms have stopped serving certain clients as a result of Consumer Duty requirements, according to Lang Cat research. Some have offboarded up to 17% of their client base. When asked directly whether Consumer Duty had made it harder to serve lower-value clients, 38% of advisers said it had made things “much more difficult.” Not a single respondent said it had made things easier.
Call it the “accidental advice gap.” Regulation designed to protect consumers may be pushing some out of the advice market entirely. When compliance costs rise and evidencing requirements become more onerous, the clients who become unprofitable to serve are inevitably those with smaller portfolios—often the people who need help most.
It’s a genuine dilemma. No regulator wants to enable poor advice or unfair charges. But there’s a real question about whether the cumulative weight of regulation is making advice less accessible, not more.
Targeted Support: Closing the Gap or Blurring the Lines?
The FCA’s response to the advice gap is its most ambitious regulatory initiative in years: targeted support.
The idea is straightforward. Create a new category between generic guidance and fully regulated advice. Allow firms to make suggestions to groups of consumers with similar characteristics—people unsustainably drawing down pensions, or those with excess cash sitting in current accounts—without requiring the full individual assessment that regulated advice demands.
The FCA calls it “game changing.” Sarah Pritchard, the regulator’s deputy chief executive, says it could help “millions of people get extra help to make better financial decisions.”
Consumer and adviser reactions are more cautious. Only 13% of consumers surveyed by Lang Cat said they’d find targeted support useful. A quarter of advisers don’t think the proposals will benefit consumers. There’s scepticism about blurring the line between advice and guidance—and concern about what happens when something goes wrong.
The regime is expected to launch in April 2026. Whether it genuinely moves the needle on the advice gap or just creates new complexity remains to be seen.
SDR: What Advisers Need to Know
Alongside Consumer Duty and targeted support, the Sustainability Disclosure Requirements regime continues rolling out.
For advisers and platforms, the key points are practical. An anti-greenwashing rule now applies to all FCA-authorised firms—any sustainability claims you make about products or services must be fair, clear, and not misleading. If you’re distributing investment products to retail clients, you need to communicate any sustainability labels and consumer-facing disclosures. Overseas products require notices explaining they’re not subject to UK sustainability rules.
The labelling regime itself is voluntary—asset managers don’t have to use sustainability labels. But if they want to use sustainability-related language in product names or marketing, they need to meet the requirements. Full entity-level disclosures for larger managers continue phasing in through December 2026.
For most advice firms, SDR is less about strategic change and more about operational compliance: making sure you’re not inadvertently making claims you can’t substantiate.
AI: From Scepticism to Adoption
The shift in adviser attitudes toward AI has been remarkable.
In May 2023, 27% of advisers said they never expected to use AI in their advice process. By late 2025, that figure had dropped to just 8%.
More striking: nearly half of advisers now say they’ve already implemented some form of AI—up from 21% just a year earlier.
What’s driving adoption? Efficiency. Meeting notes that used to take 30 minutes now take five. Client communications get drafted faster. Research happens quicker. The applications aren’t transformational—they’re practical. As Schroders noted, “It could be as simple as using ChatGPT for meeting notes or improving client communication.”
The Bank of England and FCA’s survey of AI across financial services found 75% of firms are already using AI in some form—up from 58% in 2022. Another 10% plan to within three years. The highest perceived benefits are in data insights, fraud prevention, and cybersecurity. The biggest expected gains over the next three years are in operational efficiency, productivity, and cost reduction.
Three-quarters of advisers now view AI as an opportunity rather than a threat. That’s a significant shift from even two years ago, when technology discussions in advice circles often carried an undercurrent of anxiety about displacement.
The remaining concern is understanding. The BoE/FCA survey found 46% of firms have only a “partial understanding” of the AI they’re using—typically because it comes from third-party providers. As AI becomes more embedded in advice processes, knowing what it’s actually doing matters more.
M&A: The Consolidation Machine Keeps Running
If you’re wondering whether the M&A wave has peaked, the answer is no.
UK financial services M&A activity reached its highest annual volume since 2012 in 2024, with 380 disclosed deals—a 26% increase from the previous year. Total disclosed deal value jumped from £12.5bn to £20.2bn.
Within wealth and asset management specifically, deal count rose from 107 to 122, while deal value more than quadrupled from £2.1bn to £9.3bn. MarshBerry data shows the investment advice sector averaging six deals per month through 2024.
Private equity remains the dominant force. In many months, every significant transaction involves PE funding—either directly or through portfolio companies making bolt-on acquisitions. The playbook is familiar: acquire, integrate, drive efficiency, grow, exit at a higher multiple.
For firm owners, the implications are practical. If you’re thinking about selling, buyers are active and competition for quality businesses supports valuations. If you’re thinking about growing, acquisition can accelerate the process. The middle ground—remaining independent without a clear growth or exit strategy—is getting harder to sustain as larger, better-resourced competitors benefit from scale.
Demographic Time Bomb
This might be the most predictable crisis in financial services, yet the industry keeps sleepwalking toward it.
Half of UK financial advisers are aged 50 or above. One in five is over 60. Only 6% are under 30.
The pipeline isn’t filling. FCA data shows the under-25 adviser population dropped below 200 in late 2025—a level only reached once before since 2020. Meanwhile, the over-60 category has grown nearly 12% since early 2022.
Research suggests half of advisers plan to retire within five years, with an average planned retirement age of just 52. The reasons vary—personal circumstances, stress, unwanted changes following firm acquisitions—but the direction is clear.
The client base is ageing too. Schroders found 38% of advisers now report their average client is 65 or older—up from 25% just a year earlier. Nearly half say their client age profile has increased over the past five years.
Two-thirds of advisers express concern about intergenerational wealth transfer. Yet 85% don’t have a differentiated strategy for younger investors. There’s a collective awareness that something needs to change, but less evidence of it actually changing.
The risk is obvious. Advisers who retire take client relationships with them—research suggests firms retain only 50-75% of assets when advisers depart. And if the industry can’t attract younger talent, it won’t be able to serve the next generation of clients—people currently in their 30s and 40s building wealth who want advisers they can relate to.
Case for Digital and Hybrid Advice
Look at the challenges stacking up—adviser capacity constraints, rising minimum thresholds, an advice gap that won’t close, regulatory pressure on fair value—and one conclusion becomes hard to avoid: the traditional advice model can’t scale to meet demand.
That’s not a criticism of traditional advice. Face-to-face, relationship-driven financial planning remains valuable for clients with complex needs and substantial assets. But it’s expensive to deliver. And when the economics require clients to have £200,000 or more before it’s profitable to serve them, you’re automatically excluding millions of people who need help.
This is where digital and hybrid models come in.
The idea isn’t to replace advisers with algorithms. It’s to use technology to handle the parts of advice that don’t require human judgment—data gathering, document generation, routine communications, portfolio administration—so advisers can focus on what actually requires their expertise: understanding client circumstances, building financial plans, navigating complex decisions, and providing reassurance when markets get choppy.
Done well, a hybrid approach lets firms serve more clients without proportionally increasing headcount. The adviser remains central to the relationship. The technology handles the admin.
Many firms are already moving this direction. The challenge is execution. Building a digital proposition from scratch requires significant investment in technology, compliance frameworks, and process design. Most advice firms don’t have the resources or technical expertise to do it themselves.
This is exactly the problem platforms like JustFA are designed to solve. Rather than building from scratch, advisers can launch a branded digital proposition in weeks—with integrated back office, client portal, mobile app, and investment platform already connected. The efficiency gains are real: firms using JustFA report servicing their digital client segment three times faster than their traditional book.
The commercial case is straightforward. Most advice businesses have a segment of clients—often 40% or more by number—who consume disproportionate resources relative to the revenue they generate. These aren’t bad clients. They’re just clients whose needs don’t require the full traditional service model. Moving them to a streamlined digital proposition frees adviser capacity for higher-value work and new business development, while still serving those clients well.
It’s not the only way forward. But for firms serious about addressing the efficiency imperative—and perhaps capturing some of the advice gap opportunity—digital capability has moved from “nice to have” to “necessary to compete.”
What This Means for Your Business
Strip away the statistics and several themes emerge clearly.
Efficiency isn’t optional anymore. Regulatory costs keep rising. Adviser capacity is constrained. Minimum asset thresholds are climbing. Finding ways to serve clients profitably at lower asset levels—through technology, process improvement, or different service models—has become essential, not aspirational.
The advice gap is real opportunity, not just industry hand-wringing. Millions of people need help and aren’t getting it. Firms that can deliver quality advice efficiently to clients with smaller portfolios have a genuine growth path. The hybrid models discussed above—combining digital efficiency with human expertise—are how many successful firms are approaching this.
Succession planning starts now, not when you’re ready to sell. Document your processes. Build a team. Develop client relationships that extend beyond individual advisers. Understand what makes your firm valuable. Whether you plan to exit in five years or twenty, preparation determines outcome.
Demographics are both threat and opportunity. Yes, adviser and client populations are ageing. But firms that invest in attracting younger advisers and engaging younger clients will be better positioned than those serving an ageing base with an ageing team. The wealth transfer that everyone worries about is also a chance to build relationships with the next generation.
The fundamental picture is encouraging. Demand for advice is high. Technology is making new business models possible. Those who receive advice value it. The question is whether individual firms will adapt quickly enough to capture the opportunity.
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