That would leave as many as 16,000 registered individuals “spending more time with their families” or “pursuing other opportunities” that, so far, has simply not happened.
As far as their role in providing investment advice is concerned, they have to make a choice between offering it or not, and if they don’t offer it who should they outsource it to – if at all.
This is most definitely happening, with new agreements between IFAs and discretionary managers being signed every day for DFMs to offer the independent advice that consumers still require.
One trend that is perhaps less obvious but could take off hugely next year and beyond is the provision of investment information that falls short of investment advice from firms with a consumer-facing brand.
Hargreaves Lansdown followers
An online proposition is the obvious focus for firms wishing to do so and this is where Hargreaves Lansdown dominates, with Chelsea Financial Services and Bestinvest not far behind.
Their success is a clear indication that execution-only services work in the UK but these are all businesses we in the industry know very well – how well does Joe Public know them? I would suggest, as Paul Daniels would say: “Not a lot” which is where those firms with a finance/investment brand could do incredibly well in the post-RDR world.
Earlier this week Charles Stanley announced it has hired former Hargreaves’ investment manager Ben Yearsley to provide fund research for on its direct-to-consumer business, Charles Stanley Direct, that will be launched in January next year.
However, its traditional customers are those of a certain age, probably with stockbroking/share-dealing nous, so it will be interesting to see how it fares in its attempt to reach a wider, national audience.
It is exactly this kind of audience that the comparison websites already have and it is these players who are likely to expand their investment reach into 2013.
Comparison sites
MoneySupermarket, for example, already offers an execution-only service with Philippa Gee of the eponymous wealth management firm providing an extra layer of investment research to a fund engine powered by Cofunds. It no longer simply compares prices.
GoCompare currently offers ISA product comparisons rather than any more detailed fund research though it is not too much of a stretch to think that this is an option for them further down the line.
This is a positive development and should be embraced not shunned or seen as detrimental competition to IFAs/wealth managers.
The fund groups will need to adapt their distribution to include this new provider of direct-to-consumer access and, with the increased qualifications and improved investment process being developed thanks to RDR changes, the immediate future is healthier than many of those 16,000 RIs may have thought.
