In November 2015, the UK's Financial Conduct Authority surveyed a sampling of firms that were providing retail investment advice, including financial advisors, networks, banks and life insurance companies, for business trends of regulatory interest. The regulator has now published the resultant, anonymised figures.

The regulator asked advisers if they were having any trouble with product providers when advising people about retirement income in the wake of HM Government's 'pension freedom' reforms. In response to this, 57% of firms thought that unclear disclosure of safeguarded benefits or other important information in the existing provider’s documentation was a "very important challenge."

The survey found that most firms use face-to-face meetings or telephone conversations as the primary channel for advising consumers, but two-thirds of firms reported that they tend to use technology to a significant degree in some way throughout the advice process, primarily for research, analysis and financial planning, risk profiling, customer data management and reporting. Customer-facing technology, such as tools to aid decision-making, was used to a significant degree by 15% of firms. The firms said that they used IT mainly to be more efficient and to promote consistency in the ways in which they served customers.

IT continues to be the 'great white hope' of the advice market, as the FCA discovered when 29% of firms in all (but about three-quarters of the medium-to-large ones) told it that they expected to increase their use of platforms, while 32% expected to take on more advisors over the next year. Most planned to use more technology, particularly when communicating with customers and in organising the advisory process (again, the larger firms expected to use more than the smaller). Only 11% or less expected that, over the next year, they would cater more for the mass-market. Advice to HNWIs is therefore taking up a rising proportion of the whole business.

Average revenue by advice area was another subject of the survey. In 205 responses to the question "please state revenue from regulated advice services for each of the following product areas for the [prior] period of 12 months," the figures were as follows.

• Investments 42%.
• Pensions 21%.
• Retirement income 16%.
• Protection products 10%.
• Mortgages 5%.
• General insurance 2%.
• Other 4%.

A customer’s personal circumstances and future relationship potential were rated as the two most important reasons for accepting retirement income advice customers, with roughly three-quarters of firms believing it to be a ‘very important’ or ‘important’ consideration. About two-thirds thought that each customer’s other assets and liabilities were important in this regard. They thought of pot size in isolation as relatively less important, with 13% of firms rating it as a ‘very important’ consideration and a further 28% rating it as ‘important.' In general, the survey found that the future relationship potential, referrals, and pot size were more important considerations for the smaller firms than for the larger when accepting retirement income customers.

Around half of the respondents had a tiered charging structure for advice (depending on the advice area, the proportion ranged from 47% to 51%), and the remainder had a non-tiered structure. Most firms appear to charge on a percentage basis for initial advice (i.e. a fee as a percentage of investable assets advised on or of assets under advice), but they may also have other charges or minimum charges. Taking charges for investment advice as an example, of the 190 firms that provided details on their charging structures for initial advice, 89% had percentage fees (for at least some levels of investable assets), 44% had fixed fees and 27% reported hourly charges. Most firms reported more than one type of charge.