FTAdviser's Top 100 Financial Advisers 2021 is again compiled using data provided by London-based Financial Clarity, an arm of ISS Market Intelligence, and those statistics continue to form the backbone of our rankings.
As well as a variety of asset-based metrics, details of which can be found below, the list also rewards companies that are either chartered by the Chartered Insurance Institute or accredited by the Chartered Institute for Securities & Investment.
This is an attempt to give additional focus to firms seeking to improve professional standards and maintain public trust in their services.
In 2021, we have increased the importance we give to this particular metric, meaning it now accounts for an average of 9 per cent of each firm’s score, up from 4 per cent last year.
While this figure remains low in absolute terms, the way the list is calculated means it does help offset the emphasis placed on flows and assets under management.
Methodology: the key points
- AUM held on relevant platforms accounted for an average of 49 per cent of each adviser’s score.
- Net flows as a proportion of AUM accounted for an average of 26 per cent of each adviser’s score.
- Company age accounted for an average of 9 per cent of each adviser’s score.
- Asset retention accounted for an average of 5 per cent of each adviser’s score.
- Estimated performance accounted for an average of 2 per cent of each adviser’s score.
- CII or CISI company-level accreditation accounted for an average of 9 per cent of each advisers’ score.
As these bullet points indicate, we look at factors including the growth rate of advisory businesses, AUM and asset retention, and the number of years’ experience each business has managing assets in different economic and interest-rate environments.
In order to check how advisers are managing their clients’ investments, Financial Clarity used data received directly from fund managers covering the vast majority of the retail investment market, plus 14 of the nation’s biggest investment platforms. In most cases, that means advice companies’ own platforms are not included.
As a result, the Top 100 Financial Advisers list incorporates not a company’s stated level of AUM, but rather the amount held on those 14 investment platforms and with most of the nation’s biggest fund houses.
Displayed figures have been rounded to two significant figures and include assets in retail advisory investments and pensions, reported to Financial Clarity. On top of this, firms are only included if they had £150m of gross sales or more over the 12-month period. The likes of DFM assets are not included unless submitted to ISS as such.
Clients also want to know if the adviser they see today will help them through the financial ups and downs of tomorrow. With that in mind, the list also continues to rate businesses on their ability to keep clients in their ranks.
Experience counts too. The average company has been in business for 44 years – a year less than in 2020. Strip out the handful of larger firms that have been in existence since the 19th century, and the average is still close to 35 years.
When it comes to external certification, there are cases where some appointed representatives or parts of a firm are either chartered or accredited, and others are not. In these instances, points were awarded based on the percentage of AUM held by chartered or accredited firms.
