IFA: Business to boom in March as ‘real’ RDR cut off bites

Chartered independent financial advice firm Attivo Financial Planning has predicted a boom in business in the months from March, as the end of the 60-day grace period for the Retail Distribution Review precipitates a large number of industry exits.

In an interview with FTAdviser, to be published later today, Stephen Harper, managing director at Attivo Financial Planning, highlighted that according to figures by the Financial Services Authority 25 per cent of the advisory community did not achieve QCF level 4 or otherwise have the statement of professional standing finalised in time for the initial January RDR deadline.

However, he said that because advisers had a further 60 days from the end of December to obtain their SPS, “the real cut off date” will be the beginning of March”.

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Advisers had to be fully QCF level 4 qualified by January but were given the grace period for obtaining their SPS from accredited bodies facing a rush of last-minute applications.

Mr Harper said: “In March, we will see quite a lot of advisers being de-authorised from giving pensions and investment advice so there will be probably 25 per cent of the community that were advised by an adviser that will no longer be getting advice.

“One in four clients in the UK that were getting advice will now be looking at getting a new adviser. So we actually think there is a real growth opportunity there.”

Figures from the FSA and others have previously predicted that the drop-off in the number of advisers post-RDR will be a small single-digit percentage. The FSA has not published figures in the wake of the statistics on RDR readiness.

Mr Harper expects that Attivo, amongst other adviser firms, will be picking up the slack in particular from banks which have chosen to step away from giving financial advice to their clients.

He said: “That is an opportunity. We have picked up more business from banks and private banks in the last 24 months than we ever anticipated and if you had asked me three years ago would a client search on the internet to invest £2m with an IFA, I would have said no but now I would say they definitely will.

“They will search for an IFA. Everyone is looking for somewhere to get their advice from so things for us are really growing on what we have done.

“We are looking to grow our assets under management, grow the quality end of the client, grow our recurring revenues and increase the profitability - it is a very exciting time for us. And actually I think it’s a very exciting time for the industry for those that have embraced the opportunities.

“We expect to grow as a business, we have acquired some small IFAs over the last two or three years and we expect to acquire more client banks over the next two to three years.”