In addition, AJ Bell chair Helena Morrissey will also step down from the board after less than a year in the position. She left a previous role as a non-executive director at wealth manager St James's Place after 14 months to become AJ Bell chair.

Mr Bell will step down as CEO from 1 October, as previously announced, but had planned to remain on the board as non-executive deputy chairman. 

AJ Bell said it had been having discussions with the FCA for the past month about the need for a clear distinction between the executive and non-executive roles in a regulated firm.

The FCA told AJ Bell that there would be risk to effective board governance should a founder CEO with a significant shareholding remain on the board after stepping down as CEO.

The regulator said its policy was consistent with previous messages about regulated firms and was not reflective of AJ Bell or Andy Bell.

Mr Bell will now step down from the board at the end of this month but will continue to work with the business in a consultancy role.

He will be replaced by Michael Summersgill whose appointment has now been authorised by the FCA.

Mr Bell built up and floated the platform on the stock market and will remain on the AJ Bell board as non-executive deputy chair from the same date.

Mr Summersgill has been with AJ Bell since 2007 and is currently deputy CEO. He has also been chief financial officer since 2011. He will be succeeded as CFO by Peter Birch on 1 July.

Mr Bell said: “I accept the regulator's views and as a result have decided to step down from the board in order that I can continue the journey I started 27 years ago, supporting the business in the most effective way I can.

"My focus will be on helping to build the AJ Bell brand as well as continuing to support AJ Bell's campaigning and lobbying efforts on behalf of retail investors and financial advisers. I have complete confidence in the board, Michael and the wider management team and remain a committed long-term shareholder.”

Mr Bell will also retain the right to nominate a non-executive director to represent his interests as a major shareholder on the board for as long as he remains a significant shareholder.

Chair Helena Morrissey will stand down from the AJ Bell board once a suitable replacement has been found, the company said. Ms Morrissey has been asked to work with AJ Bell on a consultancy basis to help with the diversity of its workforce and encouraging more women to invest.

Evelyn Bourke, AJ Bell's senior independent director, will lead the process to identify and appoint a new chair.