69% of adults report having sought financial advice, although 18-34s often confuse informal guidance from friends, family, or social media with professional advice. This highlights a significant gap in understanding what constitutes regulated financial advice, presenting an opportunity for providers to educate and clarify the value of professional services.
A perceived lack of need for financial advice remains a significant barrier, with 42% of non-advice users citing this as a reason for not seeking professional guidance. This mindset, coupled with concerns about cost and trust, limits market growth, particularly among those with higher savings who could benefit most from financial advice.
Long-term, engaging younger consumers presents a key growth opportunity. Leveraging digital channels and collaborating with trusted influencers can help bridge the gap between guidance and professional advice, fostering trust and long-term relationships with this tech-savvy demographic.
This report looks at the following areas:
- Market size of intermediary firms and the influence of economic pressures, including inflation and elevated interest rates, on the financial advice market.
- Consumer experiences with financial advice, including varying levels of usage across age groups, and reasons for using financial advisers.
- How consumers find financial advisers and financial information, with a focus on trusted networks and providers in comparison to digital channels.
- Barriers to seeking financial advice, such as perceived lack of need, concerns over cost, and trust issues, and the opportunities for financial advisers to address these challenges.
- Consumer attitudes toward financial advisers and the perceived value of advice.
Perceived lack of need and cost concerns challenge financial advice uptake, but opportunities exist to increase trust and engage younger, tech-savvy consumers.
Stefania Apostol, Senior Financial Services Analyst
Market Definitions
This Report examines the market for professional financial advice in the UK. Advice is distinct from guidance. According to the FCA, definitions are as follows:
- Advice – a personalised service that recommends a specific product or course of action based on an individual’s particular circumstances and financial goals. Advice is provided by qualified and regulated individuals or online by a regulated organisation. There is usually a fee for this service, which will be disclosed before any commitment is required.
- Guidance – an impartial/generic service that helps people to identify their options and narrow down their choices (eg via making suggestions), without telling them what to do or which product to buy. Guidance is free unless the provider clearly states otherwise.
In the retail investment market, there are two main types of regulated advisers:
- independent advisers offer advice on a wide range of financial products and providers across the market, and will give unbiased and unrestricted advice; they may also be referred to as IFAs (independent financial advisers).
- restricted advisers offer advice on a limited selection of products and/or providers.
Other definitions of terms used in this Report:
- Digital advice comes in many forms ranging from fully automated guidance tools and advice services to hybrid advice solutions that involve some human input, as well as fully digital IFA (independent financial adviser) services. Digital advice is provided online, via a digital platform, typically supported by AI (artificial intelligence) technology. It may also be referred to as online advice or robo advice.
- Digital IFA, a regulated, independent financial advice service offered via a platform, supported by sophisticated AI to provide personal recommendations. This is a fledgling market in the UK, and one that is still evolving. Digital IFAs typically charge much lower fees than traditional IFA firms.
- Simplified advice – refers to advice with a personal recommendation, which is limited to one or more of a customer’s specific needs and does not involve analysis of the customer’s circumstances that are not directly relevant to those needs. This advice may be delivered via traditional channels (eg in person with an adviser) or, more commonly, via digital channels (and, thus, may also fall under the ‘hybrid’ advice category).
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EXECUTIVE SUMMARY
- Opportunities for the financial advice market
- Engage younger adults to support market growth
- Highlight advice benefits to shift perceptions
- Advisers play an important role in building confidence
- Market dynamics and outlook
- Inflation drives revenue growth, but intermediary firms continue to decline
- Graph 1: number of regulated retail intermediary firms and revenue, 2019-23
- What consumers want and why
- Most adults say they have some experience seeking financial advice
- Graph 2: use of financial advice, 2025
- Demand for advice is strong
- Financial advice is sought for varied reasons
- Friends and family are key sources for finding advisers
- Graph 3: sources for finding a financial adviser, 2025
- A perceived lack of need is the main barrier to seeking financial advice
- Ongoing uncertainty will heighten demand for professional advice
- Innovation and marketing
- AI transforms financial advice, but human expertise still has a role
- Providers aim to meet diverse consumer needs
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MARKET DYNAMICS
- Market size for regulated intermediary firms
- The number of intermediary firms continues to decline
- Graph 4: number of regulated retail intermediary firms, 2019-23
- Financial advisers and insurance intermediaries decreased
- Graph 5: number of regulated retail intermediary firms, by type of firm, 2019-23
- Revenues increased in 2023
- Graph 6: total industry revenues of regulated retail intermediary firms, 2019-23
- Insurance intermediaries experienced significant growth
- Graph 7: total industry revenues, by type of firm, 2019-23
- Market segmentation
- Insurance represents the largest share of total revenues
- Graph 8: proportional distribution of total retail intermediary revenues, by type of business, 2023
- Fees and charges are the main source of adviser revenues
- Graph 9: proportional distribution of financial adviser firms' revenue, by type of business and source of revenue, 2023
- Ongoing charges account for the majority of advisers' revenue
- Market landscape
- The retail advice market is made up of many different types of firms
- Financial advisers dominate the retail investment sector
- Small advice firms account for the largest share
- Graph 10: number of financial adviser firms and staff advising on retail investment products, by size of firm, 2023
- Value of restricted advice charges exceeds its volume share of the market
- Market drivers
- Inflation eases but uncertainty creates demand for advice
- Graph 11: CPI inflation rate, 2021-25
- The base rate remains elevated despite cuts
- Financial wellbeing is fragile
- Graph 12: the financial wellbeing index, 2016-25
- Most people are still feeling the effects of higher prices
- Graph 13: cost-of-living-related issues noticed in the last two months, 2025
- The FCA publishes findings from its review of financial advice services
- The FCA proposes targeted pension support, as part of the Advice Guidance Boundary Review
- The Autumn Budget 2024 brings tax changes
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WHAT CONSUMERS WANT AND WHY
- Use of financial advice
- Most adults say they have some experience of seeking financial advice
- Graph 14: use of financial advice, 2025
- Younger people lack clarity on financial advice
- Graph 15: use of financial advice, by age groups, 2025
- Targeted support could bridge the gap in pension advice access
- Graph 16: value of savings and investments, by age groups, 2025
- Younger adults are more likely to seek financial advice for mortgages and insurance
- Graph 17: use of financial advice for mortgage/remortgage and insurance, by age groups, 2025
- Future use of financial advice
- Demand for advice is strong
- Graph 18: intentions to use a financial adviser in the next two years, 2025
- Create a starting point for a financial advice journey
- Graph 19: intentions to use a financial adviser in the next two years, by value of savings and investments, 2025
- Reasons for seeking financial advice
- Financial advice is sought for varied reasons
- Graph 20: reasons for seeking financial advice, 2025
- Higher-value savers seek advice for strategic and efficient financial growth
- Graph 21: selected reasons for seeking financial advice, by value of savings and investments, 2025
- Help consumers navigate complex financial products such as pensions
- How consumers find financial advisers
- Friends and family are key sources for finding advisers
- Graph 22: sources for finding a financial adviser, 2025
- Financial services providers also play a key role
- Graph 23: selected source for finding a financial adviser, by age groups, 2025
- Younger people turn to online sources for finding financial advisers
- Graph 24: selected sources for finding a financial adviser, by age groups, 2025
- Advice seekers tend to rely on one trusted source
- Sources of information or guidance
- Financial services providers are the main source of information
- Graph 25: sources of information or guidance for financial products or services, 2025
- Strengthen partnerships with financial providers and harness the power of referrals
- Graph 26: sources of information or guidance for financial products/services and sources for finding a financial adviser, 2025
- Partner with employers to drive financial wellness
- Younger consumers are more likely to use online platforms for guidance
- Barriers to seeking financial advice
- A perceived lack of need is the main barrier to seeking financial advice
- Graph 27: barriers to seeking financial advice, 2025
- Higher savings increase confidence, but overconfidence may downplay advice needs
- Graph 28: selected barriers to seeking financial advice, by value of savings and investments, 2025
- Be transparent about costs to ease consumer concerns
- Graph 29: cost as a barrier to seeking financial advice, by value of savings and investments, 2025
- Transparency will also boost trust
- Graph 30: lack of trust as a barrier to seeking financial advice, by value of savings and investments, 2025
- Attitudes towards financial advice
- Help consumers tackle complex financial tax rules
- Graph 31: attitudes towards financial advice, 2025
- Financial advisers help navigate uncertain times
- Younger people are more inclined to trust advisers to be fee-transparent
- Graph 32: agreement with the statement "I trust financial advisers to be transparent about their fees", by age groups, 2025
- Younger Brits are more open to digital solutions
- Graph 33: agreement with the selected attitudes towards financial advice, by age groups, 2025
- Meet consumers where they are to build advice awareness
- Engage younger adults with healthy finances early on
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INNOVATION AND MARKETING TRENDS
- Competitive strategies
- Industry consolidation among financial advice firms continues
- Consortium completes acquisition of Hargreaves Lansdown
- Quilter buys NuWealth
- St James's Place to introduce a new fee structure
- AI transforms financial advice, but cannot replace human expertise
- Launch activity and innovation
- Phoenix to launch retirement advice service
- Just Group introduces advice service for post buy-out members
- WPS Advisory and Moneyhub unveil LifeStage app
- Royal London launches whole-of-market equity release advice service
- interactive investor introduces social trading platform
- Equilibrium launches new service to attract younger clients
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APPENDIX
- Supplementary data
- Market size: underlying data
- Insurance intermediaries – sources of revenue
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Consumer research methodology
- CHAID analysis – methodology data
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