In June, I-Financial Services Group, the listed financial services group that owns Hertfordshire IFA Lyndhurst Financial Management, said it had returned to profit during the first quarter after RDR implementation and was “confident of maintaining for the rest of the year”.
The firm made a loss for 2012 mainly as a result of an investment writedown of £70,000 and income dropped over the 12 months due to RDR preparations, its operating profit actually rose during the year from a loss of close to £41,000 in 2011 to a gain of around £43,000.
Adviser network Intrinsic Financial Services reported in May a pre-tax profit for 2012 of £24.3m, a turnaround of close to £27m after it posted a pre-tax loss of £2.5m in 2011.
I could go on, but I’m sure by now you’ve got the picture.
Of course, I’m not saying there will not be examples at the other end of the scale or that challenges do not remain. What is clear, however, is that there are viable models that can not only survive, but prosper in the post-RDR world.
That advisory businesses are in demand was further emphasised last week with back-to-back studies from Axa Wealth and Standard Life, which some (including myself) have optimistically postulated could suggest a viable advice market of six figures in size.
If the number of advisers in the sector or in the pipeline is the key obstacle to success - and anecdotal evidence suggests that it is - then this is where we must direct our energies. Getting regulatory fees down and ending the perceived persecution of intermediaries by, among other things, introducing a long-stop would be a great start.
But we must also end the elegiac exaltations that make the sector seem an unattractive place to be. Not only do advisers invariably talk warmly of their love for their job and the help they are able to offer clients, but based on the above examples I’d say it also looks an extremely profitable place to be.
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