Three-quarters of UK financial advisers will continue to offer full independent advice after the Retail Distribution Review is implemented and more than 90 per cent of advisers plan to remain active in the industry over the next five years, new research reveals.
A CoreData research paper, Financial adviser behaviour and segmentation, showed that the rate of industry departures seems to be slowing with 9.6 per cent of advisers expecting to be gone within five years, down from 14 per cent in 2011.
However with 80 per cent of assets under advice in the UK originating from people aged over 50, advisers face an ongoing challenge of appealing to a younger client base.
Most of the 1,260 respondent advisers said they will continue offering full independent advice post RDR. However, the study showed 14.5 per cent of advisers plan to take the restricted independent advice route and 73.8 per cent said they will continue to offer a full independent service.
However, 7.7 per cent of advisers are not sure what type of service they will offer once RDR kicks in and 1.4 per cent said they will be giving advice tied to a particular company.
Therefore advisers may not be in as short supply post-RDR as widely suspected, although the same may not be said for their client base. More than 80 per cent of assets under advice come from over-50s.
Craig Phillips, head of UK and Europe for CoreData Research, said: “As more and more clients move into draw down phase and start chipping away at the children’s inheritance, advisers will be forced to seek new client growth from the younger end of the spectrum to drive future value into their businesses.
“In contrast to last year’s results, the majority of advisers are now claim to hold at least the basic level of qualification under RDR guidelines.
“Six in 10 advisers are competent to practice post-RDR, this is a considerable improvement from the 44 per cent who were in this position last year. Thus advisers are losing hope that grandfathering will be allowed after 2012 and have chosen to get qualified instead.
“Advisers accept that RDR is here and is happening and now are focusing on getting on with moving forward.”
