Exclusive: Mortgage broker firms up by 40% since 2016 with multi-adviser firms leading the charge
The number of mortgage broker firms came to 1,851 in 2024, a rise of nearly 40% since 2016, with around 47% being one-adviser bands, analysis has suggested.
According to analysis of Financial Conduct Authority (FCA) retail intermediary market data by this publication, while the number of one-adviser firms has grown by around 19.8% as a proportion of the mortgage broker market since records began in 2016, the number of solo-adviser firms has been gradually falling since 2016.
The number of one-adviser bands made up 55% of the market in 2016, and this has been slowly falling since 2022.
The number of 2-5-adviser firms has been growing since records began, rising by 60% from 2016 to 712 firms in 2024.
This cohort made up 38% of the mortgage broker market, a rise from 33% in 2016 to its current level.
Approximately 13% of broker firms were made up of 6-50 advisers and 2% of over 50 advisers, which has stayed roughly stable since 2016.
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Stephanie Charman, the Association of Mortgage Intermediaries’ (AMI’s) chief executive, said: “It is unsurprising that smaller intermediary firms have increased their adviser numbers. Over the past few years, intermediaries have had to navigate a period of significant change.
“Higher interest rates and ongoing rate uncertainty reshaped market dynamics, with activity shifting away from remortgaging towards product transfers, increasing workloads and administrative demands for many firms.”
She continued: “Alongside this, regulatory developments such as the Mortgage Charter and Consumer Duty may have expanded adviser responsibilities, potentially prompting some smaller firms to consider bringing in additional support or specialist skills.
“Looking ahead, demand for mortgage advice remains resilient, with recent data showing consumer confidence is improving post the November Budget and positive Boxing Day activity figures. For firms of all sizes, the challenge will be balancing the day-to-day delivery with the need to work ‘on’ the business, with recruitment decisions taken carefully against a cautiously optimistic market backdrop and continuing broadening cost pressures.”
Attracting next generation of advisers is key
Neil Hoare, sales director at LSL Financial Services, said the results could be due to the rise in self-employed advisers due to the financial crisis between 2007 and 2009, as the downturn in business led many to employ this as an avenue of growth.
“This also coincided with a reduction in the employed model for many of the large financial institutions. As bank branches closed, the need for employed advisers across the industry reduced too.
“With the increase in self-employed advisers in the industry comes a natural progression. If you are working for yourself in a firm, if you have the skill set and ambition, then why wouldn’t you want to set up on your own? If you can prove to yourself that you can create a client bank, then having your own business is a natural next step,” he said.
Hoare said this did leave a challenge for the firm to fill the role, and the “most common feedback” from firm principals now is that “it’s hard to find good advisers”.
“Being a mortgage and insurance broker doesn’t appear to be high enough on the priority list for the next generation of workers. There [have] been plenty of discussions across our industry on how to attract the next generation of brokers and the challenge remains.
“When I started in this industry, being a financial consultant was a career, a way of life in some ways and not just a job. I was part of a community. This isn’t necessarily the case anymore. So, for firms in the 2-5-adviser category, I would suggest retention of good advisers is key. Balancing time between advising customers and retaining good advisers is difficult, though, especially when there are 1.8 million customers needing advice this year,” Hoare added.
He noted that the mortgage industry is evolving, and that in large part is driven by technology. The competition for the customer’s attention means a “strong engagement strategy is a must”.
“Single-adviser firms have great ideas for growth and the challenge for them is investing time and resource in their future. For mid-size businesses, technology will make them more efficient. For the large firms, scale delivers efficiencies and an ability to differentiate their offering. All of that brought together delivers great choices for customers and ensures advice remains at the heart of good customer outcomes.
“Only one crucial question remains: How do we attract the next generation of advisers into what is such an exciting and rewarding industry? That is something we are giving a lot of time and attention, and I know the rest of the industry is thinking about too,” he said.
‘Entrepreneurial spirit is alive and well in a diverse broker market’
David Hollingworth, associate director for communications at L&C Mortgages, said the broker market has “always been made up of a diverse range of different types of firms”, from ‘one-man bands’ through to national brands.
“The figures point to good growth in adviser firms over the course of the last eight years. The pandemic may have played a part in that, as the change in the market and the way of working may have seen some decide to go it alone and set up on their own or with others.
“Despite the choppy waters and periods of instability in the global economy, the figures would suggest that brokers have successfully managed to navigate many of the challenges and perhaps take advantage of the busy periods,” he noted.
Hollingworth said that while all sizes of broker firms have risen, the growth had been concentrated in the 2-5-adviser band and 6-50 advisers, which have risen by 60% and 81% since 2016.
He said some of the growth may be businesses growing over time and edging into the next bracket up.
“The lowest growth is perhaps unsurprisingly in the very largest firms of more than 50 advisers. Making the jump to more significant adviser numbers is not easy and isn’t going to be right for everyone. All firms want to have confidence in enquiry levels and be able to generate enough interest at an appropriate cost.
“Different firms will take different approaches to that depending on their size and the market they are serving. A smaller firm is more likely to have a bias to the local area so marketing to a broader part, or all, of the country may require a new approach and different skills. That’s not easy to do and can be costly, so is where bigger firms may be better able to broaden and capture a wider audience,” Hollingworth explained.
He noted that there are still “plenty of unknowns for the market ahead for large and small” and there may potentially be consolidation in the broker market.
“However, the figures continue to point to the fact that the entrepreneurial spirit is alive and well in a diverse broker market, no matter the size,” he said.
Consolidation a ‘clear trend’ in broker market
Gareth Herbert, distribution director at Mortgage Advice Bureau (MAB), said the data highlights a “clear trend of consolidation is reshaping our industry”, and the growth in 2-5- and 6-50-adviser brackets suggests that the “traditional model is shifting toward a more collaborative landscape”.
“While some of this is driven by an ageing demographic and succession planning, we’re also seeing a growing demand for the security that comes with scale – specifically regarding lead generation and long-term business strategy. As AI and data-led technology become ‘must-haves’ rather than ‘nice-to-haves,’ more advisers are realising they need to lean on a partner that can provide the sophisticated infrastructure required to stay competitive.
“Our experience and figures at MAB directly mirror this. Our average firm size has grown to 12.4 advisers, and we’ve seen a direct correlation between that increased scale and higher productivity. While smaller firms remain remarkably resilient – largely due to the deep, trusted relationships they hold with their clients – their future efficiency will depend almost entirely on the quality of the technology they can access,” he said.
Herbert said “consolidation is no longer just a defensive strategy – it’s an enabler of growth”.
“Larger, well-supported firms are better positioned to invest in specialist roles, compliance resilience, and enhanced customer propositions, allowing advisers to spend more time advising and less time administrating.
“We must also recognise that customer behaviours are changing, and they now expect a faster turnaround time and seamless digital journeys across all elements of their lives. Buying a home, becoming a second-time mover, or looking at specialist mortgages will remain complex for most customers, and I accept that, but they undoubtedly also expect speed and convenience. Empathy, great advice, and trust still exist, and that’s one thing advisers do very well.
“Ultimately, the mortgage sector is moving toward a model where human expertise is augmented by scale and technology, and we’re having more conversations than ever with business owners about joining forces to achieve their strategic goals,” he said.
Are firms ‘growing for the sake of growth’?
Jon Stones, managing director of Mortgage 1st, said the growth in multi-adviser firms was not surprising but could highlight an “underlying issue in the industry” – that some “firms are growing for the sake of growth”.
“I only started expanding Mortgage 1st when I had no choice. We had too many leads for me to handle alone while also writing business and managing admin. Even then, my first hire was an administrator, not an adviser. It was about building capacity and structure, not headcount for appearances.
“What I’m seeing more of now is firms recruiting advisers because they want to call themselves founders or business owners with ‘X advisers’ under them. When you look behind the curtain, though, there can be a lack of infrastructure, support and substance. That’s growth driven by vanity rather than necessity,” he said.
Ceri Evans, director of Remoo Mortgages, said: “It’s interesting that there’s been an almost 10% drop in single-adviser firms over the last nine years. That figure feels more surprising than the increase in other firms, given that the perception within the industry is that many advisers new to the industry choose to go it alone when they’ve got a couple of years’ experience under their belts.
“In addition, there has been a significant increase in adviser number since 2016, there has been an increase of almost 40%. As newer advisers enter the industry, they are perhaps more likely to want to work for established firms, which could explain the growth in firms with 2-5 and 6-50 advisers.”
He said it sits in the 2-5-adviser bracket, and it was planning to grow through recruiting and training its own advisers, noting that if other firms were following a similar strategy, this would explain the growth in that category.
“For us, this comes down to training and culture. We want to ensure that our advisers have the training they need and deserve whilst also ensuring they understand and maintain the cultural that we’ve built. I’ve long held the opinion that CeMAP may be an adequate theoretical qualification, the actual practical elements of the job can differ greatly and adviser quality can be significantly different from firm to firm.
“On a weekly basis, we speak to advisers who joined firms on the promise of leads and support, only to find the reality very different. Within months, they’re looking to move on.
“That said, there are also some excellent firms led by ambitious principals who are growing for the right reasons, investing in systems, support and culture. For those businesses, increased headcount makes perfect sense. The key difference is whether growth is built on solid foundations or just optic,” Evans said.
