Advisers highlight post-RDR profitability concerns
Study indicates that remaining profitable is key concern, along with adviser charging and new legacy commission fears.
Remaining profitable is the number one concern for advisers post-Retail Distribution Review, although fewer than one in 20 advisers believe it is unlikely they will be departing the industry after the new rules come into force.
Of the 353 respondents to life and pensions giant Aviva’s latest adviser ‘barometer’, 43 per cent highlighted maintaining profitability as their key concern once the new rules come in on 1 January 2013.
Revealingly, the second most common concern - indicated by 40 per cent of respondents - is adviser charging, while just over a third said they are concerned with new rules on legacy commission and how to generate revenue and recurring income.
Just under 30 per cent said they are concerned with applying VAT to advisory charges.
Although most companies are not planning to expand, only one in twenty said they are making staff cutbacks.
Andy Beswick, intermediary director at Aviva, said: “As advisers are overcoming other hurdles, such as achieving the qualifications necessary to operate under the RDR, unsurprisingly their attention has turned to how regulatory changes will directly impact their businesses.
“Changes to adviser charging, new rules on legacy commission and applying VAT to advisory charges are practical issues that will impact on a firm’s ability to generate revenue and recurring income, all of which feeds into generating the profit necessary to remain a successful business.”