New research has predicted a 7% fall in the number of IFAs and wealth managers by 2022, despite rising demand for financial advice.

An increasingly tough regulatory environment was cited as the main reason by IFAs wanting to sell up and quit the market.

Wealth manager and Financial Planner Succession Wealth commissioned research company PollRight to research 45 wealth managers and IFAs in March and April to mark its 10th year in business and a rebrand of the company.

Despite the limited size of the survey, Succession says that sentiment clearly pointed toward “further consolidation” in the adviser market.

Despite this Succession says there could be a growing pool of potential clients waiting to be served. It cited, for example, a report predicting that 146,000 new millionaires will be created in the UK between now and 2023.

The PollRight research indicated that the “increasingly stringent regulatory environment” was the chief reason why many advisers were looking to sell their businesses. 

Half (51%) of the IFAs and wealth managers surveyed said that this was a “very important” factor for financial services businesses wanting to sell.   

This is followed by 36% who said the same about the growing pressure on costs and 34% who cited the increasing investment needed to continue operating in a heavily regulated market.

Plymouth-based Succession Wealth predicts a significant increase in the numbers of consumers who may wish to use wealth managers. 

Succession estimated that in the UK an average of 80 new millionaires will be created every day over the next five years – a total of 146,000, according to the Wealth Report by Knight Frank.

Launched in 2009 as Succession Advisory Services, the firm has grown its assets under management (AUM) to £7.75 billion with total staff approaching 600. Growth has been spurred by Succession’s acquisition of a number of financial advisory firms.

Mark Stokes, group communications director for Succession Wealth, said “We are in a very strong position to build on our growth and capitalise on the opportunities that lie ahead in what is becoming an increasingly rigorously regulated market.

“We recognise that operating in the wealth management sector is tougher than ever before.”