New data obtained through a recent Freedom of Information (FOI) request to the FCA by Network Consulting, seeking the total number of Directly Authorised (DA) intermediary firms and advisers operating in the retail advice space across both wealth and mortgages, reveals a market undergoing significant structural change.
The findings highlight notable shifts over the past five years, with contraction most visible among wealth firms.
Tables 1 and 2 (below) set out the total number of DA intermediary firms and advisers, excluding any firm categorised as a network. The trend is clear: the DA market is shrinking.
Between 2020 and 2025, the total number of DA retail advice firms operating in mortgages only, wealth only, or both areas have fallen by 17.2%, representing a net loss of 1,853 firms.
Firms intermediating in both wealth and mortgages have seen the steepest decline, down 24.4% (a reduction of 957 firms). Wealth‑only firms have also contracted sharply, falling 19.4% (a loss of 1,054 firms). In contrast, mortgage‑only firms have remained comparatively resilient, growing 11% (an increase of 158 firms) between 2020 and 2025, although they have dipped slightly from a 2023 peak of 1,640 firms, falling by 55 firms (4%). However, when combined with all firms intermediating in mortgages then the decline of 799 firms (15%).
Adviser numbers paint a slightly different picture. The sharp rise in adviser counts between 2020 and 2021 is explained by the fact that solo‑regulated firms were not required to submit Directory Persons data until 31 March 2021. This being the primary driver of the apparent jump and highlights a common misconception: most DA firms are solo‑regulated, not large multi‑adviser practices.
Reflecting the firm‑level trends, mortgage adviser numbers have remained relatively stable, increasing by around 2% since 2021 (approximately 300 advisers). Wealth adviser numbers, however, have fallen by 1,333 advisers, a decline of 12.5% over the same period.
Several factors are likely contributing to this attrition. Adviser retirement remains a persistent theme, consistent with the widely held view that the adviser population is ageing.
Additionally, some advisers have transitioned to appointed representative (AR) status, seeking the operational support and regulatory umbrella provided by networks. This shift is reinforced by the FCA’s FOI response to Network Consulting’s request on DA application approvals in January 2025, which shows a dramatic 75% decline in approvals between 2020 and 2024 (Table 3).
Possible drivers include higher threshold conditions, increased responsibilities following Consumer Duty, and the perceived complexity of the application process, collectively suggesting a cooling appetite for direct authorisation.
When compared with the AR market, the contrast is striking. According to the Network Consulting league tables (produced since 2022), the top 30 networks with mortgage advisers, (wealth network data has not been recorded over the same period), have remained stable, even showing modest growth (Table 4).
The number of AR firms is up 0.03%, and adviser headcount has increased 1.7%. This growth is despite the exit of Tenet Group and the removal of two smaller networks from the table after falling below the 20‑firm threshold, accounting for 34 firms and 120 advisers. The data suggests that while the DA market contracts, networks continue to attract and retain advisers, offering a comparatively stable platform amid rising regulatory expectations.
These trends raise important strategic considerations for firms assessing their future direction. As the DA market tightens, networks may present a more resilient route for growth, operational support, and compliance oversight. However, the decision to remain independent or join a network should be grounded in rigorous due diligence, robust benchmarking, and a long‑term view of business sustainability.
