The UK financial advice market remains “stable but evolving”, with adviser numbers holding steady despite consolidation and rapid structural change, according to new research from the Financial Conduct Authority (FCA).

The FCA’s Financial advice firms survey 2025, based on responses from more than 4,100 firms, found that the number of advisers has remained broadly unchanged at around 31,000 since 2021, even as the number of firms has fallen by 15 per cent over the same period.

The regulator said this reflected a market that continues to serve client demand while adapting to consolidation, technological change and evolving regulatory expectations.

However, the data also showed that market delivery is becoming increasingly concentrated, with larger firms accounting for a growing share of assets under advice, while smaller firms continue to play a key role in providing local, relationship-based advice.

Broadstone head of personal financial planning, Rob Hillock, said the findings highlighted both resilience and transformation within the sector.

“The FCA’s findings paint a picture of a market that is holding steady in capacity but evolving rapidly in structure,” he noted.

“Adviser numbers remain, which suggests the profession is proving resilient, even as consolidation reshapes how services are delivered.”

The report also highlighted the growing importance of technology and artificial intelligence (AI), although adoption remains uneven across the market.

While many firms are exploring AI to improve efficiency, compliance and client engagement, uptake varies significantly by firm size, with larger firms more likely to be implementing or considering its use.

Hillock warned this could create a widening divide across the sector.

“Technology and AI are clearly becoming a differentiator, but adoption remains uneven, creating a growing divide between firms that are investing in more efficient, data-driven advice models and those that risk falling behind as client expectations continue to shift,” he said.

The FCA also confirmed that pensions and retirement advice remain central to the market, with 69 per cent of clients seeking support on retirement saving, consolidation or accessing their pensions.

This reflects the continued shift from defined benefit to defined contribution pensions, which is increasing the need for ongoing, personalised advice as more individuals enter decumulation without guaranteed income.

Hillock argued that the focus on retirement income advice was particularly important.

“Retirement advice sits at the heart of the market, with around seven in 10 clients seeking support on saving, consolidating or accessing their pensions,” he stated.

“As the shift from defined benefit to defined contribution continues, more individuals are moving into decumulation without the safety net of guaranteed income, increasing the need for ongoing, personalised advice.”

Meanwhile, the FCA noted that many firms have already made, or are considering, changes following its thematic review of retirement income advice, particularly in areas such as income sustainability modelling, governance frameworks and client reviews.

Indeed, three-quarters (75 per cent) of firms said they had reviewed or were reviewing their approach to calculating sustainable income, while 66 per cent had made changes to control frameworks and management information.

Hillock said this was a positive step but stressed that delivering good outcomes required ongoing oversight.

“Managing drawdown sustainably requires continuous monitoring, clear risk profiling and regular engagement with clients as their circumstances evolve,” he added.

Beyond retirement advice, the report highlighted ongoing challenges around diversity and workforce demographics, with women accounting for just 18 per cent of financial advisers and more than half of multi-adviser firms having no female advisers.

The FCA also pointed to an advice gap, noting that only around 9 per cent of UK adults currently take financial advice, despite millions holding significant cash savings that could be invested.

Hillock concluded that the evolving market would place greater emphasis on the value of advice.

“Ultimately, delivering good retirement outcomes is about more than technical modelling.

“It requires advisers to translate complex trade-offs around longevity, investment risk and income needs into clear, actionable plans that clients understand and can adapt over time.

"That is where the real value of advice will continue to be demonstrated.”

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