He also wrote: "During authorisation, we assess a variety of factors to ensure our minimum requirements are met, including whether a firm has adequate financial resources for the regulated activities it wants to provide.
"We also consider if there are risks of harm in a firm’s business model or culture. We are aware that not all firms are sustainable in the long term, whether due to their business models or stressed circumstances, and the pandemic has accelerated some of these issues.
"We have been increasing our supervisory work in this area to match the level of risk we are seeing in the sector."
Poll still open
Billingham's comments came after Phil Bray, founder of adviser marketing consultancy the Yardstick Agency, carried out a poll on social media platform X.
The poll, which Bray opened on March 7, and is still open for responses, asked whether advisers - if starting out today - would rather go DA or be an appointed representative of a network.
As of March 8, more than 100 advisers had responded, and the majority - over 60 per cent - said they would want to go DA.
Some advisers, such as Victor Sacks, founder of VS Associates, said he had ticked 'network', because of the costs of going DA from the off.
He explained: "If you're an established employee/partner, decent cash balances and can wait for authorisation, then go DA. If you are not, then maybe consider working with/for someone for a few years, then go to a network?"
Bray responded, saying: "I've heard a few would-be-DA firms in that position though who've not been able to get direct authorisation and have, therefore, had no choice but to go networked."
simoney.kyriakou@ft.com
