Almost 20 per cent of advisers plan on going restricted in the next 12 months, up 5 per cent from April, new data has revealed.
Financial services consultancy Harrison Spence’s latest IFA survey, conducted in October amongst 230 financial advisers, revealed that 42 per cent see their business becoming restricted in the next five years and 18.9 per cent in the next 12 months, which is up from 15 per cent in April.
While more than half of those surveyed (57.9 per cent) said that they will never succumb to restricted status, this is down from the 74 per cent who declared they would never become restricted when the same question was asked six months ago.
FTAdviser’s own data for July to September 2013 has revealed that of 834 firms in 2013 75 per cent were independent, while for the same period this year out of 588 firms 65 per cent are independent.
Brian Spence, the firm’s managing partner, stated that this trend seems to be driven primarily by regulatory pressures.
“Our experience is that today, many IFAs feel like they are only just staying on top of their regulatory obligations, which are eating further and further into client-facing time.”
Almost 70 per cent cited regulation as the greatest challenge facing the industry today, with an “out of touch” regulator being the key factor in the declining job satisfaction many industry veterans are feeling.
Mr Spence added: “Hardworking advisers need to look for ways that they can free themselves up to do what they do best - forging longstanding relationships with clients, based on a deep understanding of their financial needs.
“The many determinedly independent IFAs who regard restricted status as a pill too bitter to swallow, need to ensure that they fully explore their options – and that their profitability is not sacrificed at the expense of retaining independence.”
peter.walker@ft.com
