2021 Outlook: The State of Franchising in the Finance Sector

Alice Tuffery, writer

Published at 09/02/2021, Updated on 04/05/2022 , Reading time: 5 min

2021 Outlook: The State of Franchising in the Finance Sector — Photo © Finance_Sector_Outlook.jpg

Interested in starting a finance business? As we emerge from the Covid-19 pandemic, taking the opportunity to help others with financial management is a great idea. Here’s an overview of the finance sector in 2021.

There are plenty of perks to joining the finance sector; great income potential, remote work opportunities and the chance to support others, to name just a few. But, considering the ongoing impact of Brexit and the coronavirus pandemic on the UK’s economy, is it a good time to explore franchise opportunities in the finance sector?

The finance industry in 2021

Back in 2019, businesses in the financial services sector generated £132 billion for the economy, which equated to just under seven percent of the UK’s total output. At the start of 2020, 1.1 million people - and 3.2 percent of all employed individuals - worked in financial services in Great Britain.

Unsurprisingly, London is hugely important for the UK’s finance industry, and is responsible for half of the total economic output of the financial services sector.

According to the UK Parliament website, the finance industry is less affected than other sectors by some of the challenges of the Covid-19 outbreak because most professionals can work remotely. When comparing pre- and post-pandemic figures, the results are less concerning than in other industries.

A twice-yearly ranking of the competitiveness of financial markets compiled by a City of London and a China-based think tank ranked London second in the world (narrowly behind New York) in September 2020. —UK Parliament

In November 2020, the financial services sector generated three percent less capital for the economy than in February 2020. Around 24 percent of employers were using the furlough scheme to pay their workers, and 25,000 employees in the industry had been enrolled onto the programme. Just two percent of people with eligible financial services jobs were on furlough in November 2020, compared to 13 percent across the UK in general (UK Parliament).

Like almost every sector, the finance industry has lost businesses and jobs as a result of the Covid-19 pandemic and the UK’s withdrawal from the EU. While experts say the damage may not be as significant as people had previously anticipated, we won’t know for a while whether this is the case.

At the moment, the government is in the process of updating regulations surrounding the finance industry in order to encourage international organisations to continue working with UK businesses.

The Financial Times Investors’ Chronicle reported on 21 January 2021 that the London Stock Exchange is preparing for “one of its best starts to the year in a long time”. —House of Commons Library Briefing Paper

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Finance sector business outlook

With specialist knowledge of economics, companies in the finance industry are well placed to offer expert advice on financial management to businesses and the general public. Being able to provide valuable insight and guidance at a time of huge uncertainty puts businesses in this sector at an advantage.

Franchises have been able to shed light on complex subjects, both as part of their services and through free marketing materials. For instance, TaxAssist Accountants and Certax have explained the government’s latest Covid-19 support packages and offered insight into how Brexit might affect businesses’ operations respectively.

While some companies have suffered setbacks, the vast majority of finance franchises have been able to continue operating successfully. Their services are in high demand generally, and become even more valuable during times of economic uncertainty. The success of franchises in the finance sector is demonstrated in news stories highlighting feats such as a Brokerplan franchisee’s £14,000 net weekly income.

The UK’s growing fintech (financial technology) sector has been cited as a particular area where the UK is marked for expansion, with nine private UK fintech companies valued at over $1 billion, compared with six in the rest of Europe. - House of Commons Library Briefing Paper

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Advantages of running a finance franchise

There are many reasons to consider running a franchise business in the finance sector in 2021. Primarily, financial management services that are ordinarily in high demand have become even more vital following Brexit and the pandemic. And, as a business owner in the industry, you can make a real difference to the lives and livelihoods of others.

What’s more, most people in the finance sector can carry out most of their tasks online and have the option to work from home. Not only does this help you achieve a more flexible work schedule, but it could also protect you from future pandemics and other crises.

Plus, there’s the option to go into niche areas and offer a specialist service to beat the competition. Often, businesses operating in the finance sector have great earning potential too.

Franchise opportunities in the finance sector

While a proportion of businesses in the finance sector have suffered as a result of changes over the past few years, the industry as a whole appears to be on the up. If you’re interested in taking advantage of the finance sector growth, why not become a franchisee and benefit from a proven business model? You’ll get expert support from a franchisor who has already achieved success in the industry.

There are plenty of franchise opportunities in the finance sector, particularly among mortgage broking and bookkeeping and accounting businesses. To find out more, take a look at the Top 5 Finance Franchises in the UK.

You may also be interested in some of our other business articles, such as our guide to incorporating digital solutions into a finance franchise. Use the search box to find the publications you’re looking for. And keep up to date with the latest industry developments in the finance industry with our franchise news articles, released twice a day.