According to a report from CoreData Research, the size of the execution-only market in the UK will grow almost three-fold from 1,950 in 2012 to 5,375 in 2014.
“Against a backdrop of new regulatory change and compounded by the challenge of would-be client reluctance in paying a true price for advice post-RDR, it all adds up to advisers seeking new income streams,” said CoreData Research’s UK principal, Craig Phillips.
On top of this headline figure, CoreData Research found that 70% of advisers who are yet to offer execution-only services via a platform, but plan to do so in the next couple of years, expect to make the service available only to new non-advised clients.
The almost three in four advisers who expect to begin marketing their business to new clients but without any traditional ‘advices service’ to boot is very telling, CoreData Research said.
One in five to offer execution only
Currently less than one in 10 advisers in the UK (7.8%) offer clients the ability to conduct execution-only transactions via a platform.
But nearly double this proportion (13.7%) intends to begin offering clients such a service, bringing the total proportion to 21.5% of the UK adviser population.
“Adding an execution-only service is not just about new sources of revenue though, for 55% of advisers planning to add these services their intention is to do so as a value-add for existing clients,” Phillips said, and in these instances the transaction only service will be complimentary to what the client is already offered.
Among the 45% of advisers who plan to charge for offering a transaction only service, the majority are yet to determine how they will charge clients for access.
Options for this include an annual flat fee or some type of service charge, which will be asked particularly of new, non-advised clients.
CoreData Research gathered information over a four-week period from May through to mid-June 2012 and 1,245 advisory professionals participated in the study. The above statistics are based on an estimate of 25,000 financial advisers in the UK.
