third of advisers to be restricted

Almost one third of advisers will become restricted in the next three years as the term becomes less stigmatised, with significant migration set to start in 2013.

third of advisers to be restricted


Findings from an extensive online survey of UK intermediaries found 20% already plan to offer a restricted service in 2013, 4% tied and 16% specialised down product lines.

The survey, conducted by online adviser community PanaceaAdviser in partnership with research organisation GfK, asked questions to gauge intermediaries’ intentions and attitudes towards the post-RDR advice market.

Just over two thirds (68%) said they would be offering an independent financial advice service this year, while 13% did not know whether they would be independent or restricted.

Meanwhile, the prediction that up to 30% of IFAs would become restricted in the next three years came from Prudential’s distribution change director, Russell Warwick.

Interestingly, 39% of respondents to the survey said receiving referrals from solicitors and accountants was very important to their business.

An avenue that was only recently opened up to restricted advisers after the Institute of Chartered Accountants in England and Wales and the Solicitors Regulation Authority said their members could choose to refer clients to an independent or restricted adviser.

£50k barrier of advice

In terms of client segmentation, £50,000 to £100,000 seems to be the range of minimum asset value an adviser needs to see to pro-actively service a client in the new financial services landscape.

Just over a third (34%) pitched £50,000 as the benchmark, while another 20% said £100,000 would be the minimum asset level required.

But different levels of service were likely to be provided by the same advisory firm, ranging from transactional, through restricted planning, to actively-managed bespoke independent service.

The preferred method of charging for independent advisers is overwhelmingly adviser charging through the product (72%) while only 25% said they planned on offering a service charging an hourly rate for advice.

This meant advisers leant towards product providers accommodating adviser charging.

“If they do not accommodate adviser charging it is unlikely I will use them,” said one, “They must accommodate adviser charging,” said another.

Mark Rodgers, MD at Clay Rogers & Partners said in the research: “The concept of ‘any business is good business’ is so out of date, it is laughable. The main goal is to engage clients in long-term relationships that are very well remunerated. For this remuneration the client gets a first-class service and uncompromising advice.”





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