The managing partner of London-based financial services consultancy Harrison Spence Partnership, said: “The industry is starting to accept the restricted model. You can see where the market is going.
“Those who want to stay in business are going to have to decide how they move forward, either by agreeing a sale or deferred sale to a large consolidator, or adopting a restricted advisory model.
“Becoming restricted makes it so much easier to manage a business, and gives advisers a clear investment proposition, and more time to spend with their client, so the question should really be whether they take the King’s Shilling and go with a large firm, or remain independent of these firms but with a restricted proposition.”
Mr Spence added that there would continue to be considerable activity among advisory firms next year, as acquiring firms backed by private equity money specifically target large advisory firms, triggering consolidation.
He said: “Interestingly, each has the backing of an overseas provider, in some instances private equity firms, and no advisory firm is too big to be bought.”
Meanwhile, Nick Hungerford, chief executive of online investment website Nutmeg.com has claimed DIY investing will accelerate as “financial advisers drag their heels in 2014”.
He said: “IFAs have been slower than predicted to respond to the new regulatory guidance but we expect to see many more businesses restructuring in 2014.
“Sadly this delay is not one caused by a client-centric mindset, rather the fact that advisers can eke out trail commission for one more year.”
His comments came as a poll carried out by GfK and online adviser community Panacea Adviser found that 46 per cent of advisers believe a regulatory ban on trail commission agreements made before the implementation of the RDR would make their business unsustainable.
Martin Grimwood, GfK divisional director for life, pensions and investments, said: “While one of the objectives of the RDR was to make the cost of advice very clear, our research suggests strongly that the adviser market still needs time to adjust to the introduction of the RDR. This is the wrong time to consider changing the approach to trail commission.”
Derek Bradley, chief executive of Panacea Adviser, said: “With so many advisers clearly concerned about the sustainability of their exit plans should trail commission be removed, the regulator needs to consider long and hard whether this is a wise, or even fair, change in regulation.”
Fiona Sharp of Almary Green in Norwich said: “I imagine that some IFAs may be finding it difficult post RDR but that is because there are all sorts of hurdles to get over, such as capital adequacy. It also takes longer to deliver advice because of the rules.”
Keith Macdonald, certified financial planner for Worcestershire-based Broadway Financial Planning, said: “We have remained independent but I can see why some have opted for the restricted approach. As long as a customer is aware of the definition, and the adviser well qualified, it’s fine, and probably suitable for many mass market firms. We like being independent in both senses.”