Perspective: Corporate clients will resist fees post-RDR
Private clients more open to change due to personal relationship with adviser, group operations director explains.
Advisers will face a greater challenge from corporate clients than from private clients in switching to a fee-based model, national IFA firm Perspective Financial’s Peter Craddock has predicted.
In an interview with FTAdviser as part of a new weekly interview series on advisers’ post-RDR plans and predictions, to be published today (6 July), Mr Craddock, group operations director at the firm, said: “The one area which is more difficult potentially is in the corporate market.
“Private clients get it when there is a requirement to charge fees; big employers are going to be harder to persuade to move to a fee model because it means writing a check to the advisers.”
Because many businesses are under financial strain and employers are often more cautious with expenditure anyway, he expects that this sector will be more resistant to the changes wrought by the Retail Distribution Review.
Private clients on the other hand are more likely to have a personal relationship and established history with the adviser, therefore being more trusting and accepting of change.
However, Mr Craddock said that Perspective would be targeting business in the corporate arena, adding: “We have all that we require to thrive in that market but it’s a tougher market when there isn’t a lot of cash around sitting in a business’ balance sheet.”
Another area Mr Craddock predicts will face a tougher challenge with RDR is that of product providers, who will have to adapt their legacy IT systems to meet new requirements.
In the interview Mr Craddock also elucidates on Perspective’s review of its independent status post-2012 and explains why he feels that this is no longer a key benchmark and why his firm is instead concentrating on chartered status for its advisers.