New charging rules brought in by the Retail Distribution Review has led to an increase in income despite fewer clients being served, an IFA has claimed.
In an interview with FTAdviser to be published later today (24 May), Trevor Phelps, principal of A Finance IFA, said that although he had to trim his client book post-RDR, more regular service of those remaining is generating more income than pre-2013.
Mr Phelps said: “Before I changed to an RDR way of working in 2010, I looked after around 150 clients.
“Now I have got about 40 clients that I deal with on a regular one-to-one basis.
“If anything it has increased my level of income because before I was working on an arrangement where half a per cent trail was in place.”
Although this is good news for him, he did admit that RDR has not benefitted people with less to invest, who are more likely to be given up by their adviser.
A poll conducted by adviser network Tenet in 2011, almost half of respondents predicted their income would fall by up to a quarter as a result of the regulatory change.
Separately, a Coredata survey published in March 2012 found that advisers who charge up to £100 per hour take just over 40 per cent of their income from initial commissions on product sales, and would therefore be at risk of losing revenue post-RDR.
More recently a poll of 500 forum users published in January found the majority were uncertain about keeping their income levels up during 2013.
However, listed IFA firm Lyndhurst Financial Management this year (30 April) reported increased revenue due to the adoption of RDR rules.
