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The IFA industry is becoming increasingly polarised between strong and weak players with “radical consolidation” set to hit the market over the next year, research suggests.
Plimsoll analysis of the top 1,000 IFA companies in the UK found a growing gulf in performance, with 159 struggling companies identified as "in danger" and 601 booming firms categorised as "strong".
The offshoot of such wide fragmentation will see a growing tide of consolidation sweep the market as the strong companies buy up their distressed competitors.
"The market, in the current economic climate cannot support this many companies," says report author David Pattison. "There has to be further, more radical consolidation in the market."
The study also sheds light on regional disparities in the concentration of adviser firms and performance. Firms in the Northern Home counties boast 237 strong firms out of a total of 385. In South Wales, eight companies out of a total of 15 are rated as strong, with four in danger.
Region |
Total companies |
In Danger |
Rated as Strong |
Exposed to takeover |
| East Midlands | 33 | 2 | 21 | 3 |
| Essex | 50 | 11 | 30 | 7 |
| North East | 13 | 1 | 10 | 0 |
| North West/North Wales | 66 | 11 | 32 | 14 |
| Northern Home Counties | 385 | 55 | 297 | 54 |
| Northern Ireland | 10 | 1 | 4 | 3 |
| Preston Conurbation | 17 | 3 | 12 | 3 |
| Scotland | 51 | 7 | 36 | 7 |
| South East | 31 | 4 | 25 | 3 |
| South East Midlands | 11 | 2 | 5 | 2 |
| South Wales | 15 | 4 | 8 | 3 |
| South West | 77 | 9 | 51 | 9 |
| Southern Home Counties | 85 | 15 | 47 | 10 |
| Thames Valley | 68 | 12 | 38 | 10 |
| West Midlands | 33 | 9 | 17 | 9 |
| Yorkshire | 55 | 13 | 28 | 9 |
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| Comment | Does your area have the most 'in danger' IFAs? |
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Names please!
Does Plimsoll publish a list of the top 1000 firms by name?
Posted by: Mike Shaw
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Criteria?
It would be interesting to know what criteria were used when they made these definitions.
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