Interestingly, 5% of intermediaries say they are now offering a lower standard of advice than before RDR was introduced which is something the FCA should take on and examine further.
While 43% of intermediaries surveyed feel their standards of advice have improved, 59% believe RDR has improved or significantly improved their investment knowledge.
According to Mark Stevens, head of intermediary services at Investec Wealth & Investment: “The core theme is that IFAs are far more positive, they run far more robust businesses and they are now able to spend more time doing what they are good which is looking after their clients.”
The intermediaries, however, also recognise the challenges that remain as well as those that have directly come from the implementation of RDR, including the cost and its impact on profit levels. Another cost concern is the hike in professional indemnity insurance.
Stevens added: ““One year on, the overriding challenge posed by RDR has been the financial costs involved with transforming their business models and the impact this had had on their profitability. This has translated into consolidating and in some cases reducing client bases in favour of driving profitability. We expect that over 2014 the focus will shift back to growing their businesses.”
Discretionary fund managers have also benefited as nearly a quarter (23%) of intermediaries have increased – or plan to – the outsourcing of client portfolios to DFMs. Only 3% have indicated they will outsource less private client business.
For me, there is still one outstanding question to answer: if the increase in those who feel their knowledge has improved is greater than the increase in those who feel their levels of advice have improved is this because they feel their levels of advice have always been better than their knowledge?
