Almost two-thirds of advisers intend to move all their clients to an adviser charging model and stop taking trail on legacy business within the next 12 months, a survey of advisers using the Skandia platform suggests.
According to the results of a survey of 557 advisers on the platform’s database, 62 per cent will move to adviser charging “alone” within 12 months. By mid-2015, three-quarters of advisers state they will have ditched trail altogether.
Other data from Skandia suggest 30 per cent of policies, accounting for 38 per cent of assets held on the platform, are already taken out on an adviser charging basis.
The FCA’s recent confirmation of a ban for platform rebates, which included the introduction of a sunset clause banning all legacy rebates by April 2016, had sparked speculation that trail would be finally ended by the regulator.
Skandia’s survey also suggests that most clients choose to pay the advice charge for on-going service through the product. Three-quarters of advisers said that over 90 per cent of clients choose to pay for ongoing service in this way, citing client preference as the reason.
Michael Barrett, platform marketing manager at Skandia, said: “It’s clear that advisers are taking control of their own destiny post-RDR and are actively taking steps to transition their clients from old commission structures to adviser charging.
“The large movement away from a commission to adviser charging model is a clear indicator that advisers are recognising the peace of mind that a compliant proposition can deliver to them and their clients.
“It is interesting that advisers anticipate that the pattern of how their fees are paid to change over time, with more clients choosing to pay adviser fees directly rather than via their product as they do today.
“This suggests that as adviser fees start to outweigh commission over the next year, customer understanding will increase and payment patterns will evolve.”
