Latest Figures Reveal More Advisers Opt For A Restricted Advice Model Post-RDR
New findings from ORC International have revealed a significant rise in Independent Financial Advisers (IFAs) who plan to adopt a restricted advice model after the Retail Distribution Review (RDR) comes into effect.
Online PR News – 26-September-2012 –New findings have revealed a significant rise in Independent Financial Advisers (IFAs) who plan to adopt a restricted advice model after the Retail Distribution Review (RDR) comes into effect.
The RDR, which comes into force on 31 December 2012, will change the way customers receive financial advice and aims to increase consumer confidence with their retirement and investment planning.
Global research firm ORC International has released figures from its bi-annual investment tracking survey, Investrack, which found 18% of IFAs plan to use a restricted model – up from just 8% in February 2012.
While independent advice remains the most popular choice, it has declined from three quarters in February 2012 to two thirds in August 2012. A further one in five have yet to make up their mind.
National IFA firms look most likely to opt for the restricted advice route (30%) compared to only 3% of small independents. There is also a regional divide, with 30% of investment advisers in the north looking to go restricted compared to 14% in the Midlands/Wales/south west and just 5% in the south east/East Anglia/London.
The latest survey also exposed the perceived impacts on the advisers’ business. More advisers anticipate ‘the business will have fewer customers’ (rising to 24% from 20% in August 2011) and recognise they ‘will have to manage current customers expectations more effectively’ – doubling from 12% in August 2011, to 24% in August 2012.
As in 2011, the largest impact stated was the ‘move to completely fee-based remuneration’ (27%) and a further 14% felt the business will earn less – unchanged from last year.
Hanya Dezyk, Research Director at ORC International, said: “Now that RDR is just around the corner attention has moved away from the initial hurdle of achieving qualifications to adapting business models and managing customer expectations.
“More intermediaries appear to be considering the options around the restricted advice model, particularly outside London and the south east, as a way forward for their business.”
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