FCA advice survey 2025: growth needs a capacity evidence trail

At a Glance

The FCA’s 2025 financial advice firms survey provides data on adviser capacity, outsourcing, consolidation, and client service for around 5,500 firms. Advice firm owners, compliance leaders, COOs, consolidators, and acquirers should evaluate whether their operational controls and evidence of ongoing service scale proportionately with growth plans.

The FCA’s April 2026 publication offers a comprehensive dataset covering more than 4,100 firm responses and around 31,000 registered advisers. It highlights a 15% reduction in firm numbers since 2021, stable adviser counts, and a client base of approximately 4.1 million retail clients with £1 trillion in assets under advice. This data provides useful context for firms considering growth, outsourcing, or consolidation as it underscores the importance of aligning resource capacity and oversight with business expansion.

Growth is not only a headcount question. The FCA's data shows widespread use of third parties and warns that resourcing needs to keep pace with the scale and complexity of groups growing through acquisition. MEMA recommends testing whether adviser capacity, support resources, provider oversight and evidence of ongoing service remain credible as the operating model changes.

Who can use the survey

The FCA's survey is most relevant to financial-advice firm owners, compliance leaders, operations teams, consolidators and acquirers. Its figures describe the market at sector level; they do not set minimum adviser ratios, outsourcing limits or a preferred operating model for an individual firm.

The figures are market context, not a staffing ratio or operating-model standard. MEMA recommends that an advice firm, consolidator or acquirer explain its own capacity, service and oversight evidence rather than treating a sector average as a safe benchmark.

Growth questions the averages cannot answer

The FCA’s data showing stable adviser numbers despite fewer firms suggests consolidation, which can increase operational complexity. Boards should evaluate whether their current resource allocation and control frameworks can absorb additional scale without compromising ongoing service quality or regulatory compliance. This includes reviewing outsourcing arrangements to ensure they remain fit for purpose as the firm grows.

MEMA recommends that firms establish clear evidence trails demonstrating that ongoing advice and client service obligations are met consistently as business models evolve. Given the FCA’s emphasis on pensions and retirement as predominant client objectives, firms should tailor their monitoring and reporting to these areas. Firms may benefit from scenario testing and capacity modelling to anticipate control gaps before they arise.

The survey is most useful as a challenge tool. A firm can compare its growth plan with evidence on adviser capacity, support resources, outsourcing oversight, service delivery and integration risk, then explain why its own model remains supportable rather than treating the market average as an answer.

What the Evidence Shows

Market contraction and adviser stability

The FCA survey reports a 15% reduction in the number of financial advice firms since 2021, while the number of registered advisers has remained broadly stable. The figures are consistent with consolidation, although they do not explain every cause of the reduction. Firms should assess how these dynamics affect their competitive positioning and whether their adviser capacity aligns with client demand and regulatory expectations for ongoing service.

Outsourcing prevalence and control implications

The FCA data shows that third-party outsourcing is particularly common for compliance and monitoring functions, as well as paraplanning, investment research, and client due diligence. MEMA recommends that firms test whether their oversight frameworks adequately cover outsourced activities, ensuring that control standards are maintained and that outsourcing does not impair the quality or consistency of client service.

Ongoing advice and client service focus

According to the FCA, 88% of retail clients receive ongoing advice, with pensions and retirement being the primary objectives for 69% of clients. This underscores the importance of robust evidence of ongoing service and client outcomes. Firms should review their processes and data capture to demonstrate compliance with ongoing advice obligations and to support board-level oversight of client outcomes.

Growth through acquisition and resource alignment

The FCA warns that resourcing must keep pace with the scale and complexity of groups growing through acquisition. This highlights the need for firms to critically assess whether their operational capacity, adviser support, and compliance monitoring scale appropriately with business expansion. Boards should scrutinise integration plans and evidence of control effectiveness post-acquisition.

Sector benchmarks versus firm-specific application

The survey reports sector-level findings; it does not set firm-specific capacity rules or guarantee future market outcomes. Firms should use this data as a reference point but must tailor their capacity planning, outsourcing arrangements, and client service evidence to their unique business models and risk profiles.

Governance Priorities

Capacity evidence for the board

MEMA's view is that the FCA's financial advice firms survey 2025 highlights the governance challenge of ensuring that adviser capacity and operational resources scale in line with growth ambitions. Boards should question whether the firm’s control environment, including compliance monitoring and client service evidence, remains effective as the business consolidates or outsources key functions.

Boards should also consider the quality and completeness of evidence supporting ongoing advice delivery, particularly given the FCA’s finding that pensions and retirement are the main client objectives. This evidence underpins regulatory compliance and client outcomes monitoring. Boards can request regular, data-led reports that demonstrate ongoing service standards and identify any emerging capacity or control gaps. This approach supports informed decision-making and risk management in a changing market environment.

MEMA helps firms apply regulatory developments through its advice-firm compliance and governance support.

Further reading: strengthening Consumer Duty board reports.

Source Evidence

Disclaimer

This article is for general information only and does not constitute legal or regulatory advice. Firms should assess the application of regulatory requirements by reference to their permissions, products, customers and operating model.

How MEMA Can Help

MEMA can help firms translate regulatory change into practical controls, policies, monitoring activity and board evidence. Book a free scoping call to discuss what this development means for your firm.