Only 6% offer restricted advice: SimplyBiz survey

Although the majority of advisers admit that the Retail Distribution Review had affected their business, most remain positive about their future prospects and only 6 per cent have switched to offer a restricted model in the new world, research from SimplyBiz found.

The compliance and business support services firm argued its survey, conducted in December among 350 of its adviser members, proves the RDR has done little to change advisers’ status despite widespread predictions that more firms will become restricted in 2014.

Jim Reeve, managing director of consultancy Signature Private Clients, previously told FTAdviser that for networks and larger firms to succeed, they must “urgently transition” to a fully vertically integrated restricted advice model, adding this is the “only way they will ever generate profit and gain any control over their client offering”.

National IFA Foster Denovo chief Roger Brosch also told FTAdviser he believes the “mid-market” will move strongly towards restricted advice propositions “as it realises the regulatory standards expected by the FCA and the full costs associated with remaining independent”.

Of the advisers surveyed by SimplyBiz, 90 per cent said they remain bullish about their future, despite 80 per cent saying the implementation of the RDR had affected their business.

With regards to permissions, 83 per cent of those surveyed indicated they had not changed in the last year, nor did they foresee any changes in the future. Only 6 per cent said they had moved to a restricted model.

The research found 80 per cent of advisers said they received their initial adviser charge as a percentage of the amount invested for retail investment products, with 61 per cent taking a percentage of funds under management as their ongoing service.

Just 12 per cent of advisers said that feedback from clients with regards to new remuneration models had been negative. Of this, 32 per cent indicated a preference for trail commission.

Matt Timmins, SimplyBiz’s joint managing director, said: “From speaking to advisers in the field, there is a defiant air of optimism almost across the board, which is echoed in our survey results. Advisers have always been resilient and most have taken the changes brought about by the RDR in their stride and are seeing an increase in business as a result.

“We were particularly interested to see that the majority of advisers are keen to remain directly authorised in the ‘new world’. These statistics have also been supported by our current recruitment activity within the group – with over 80 per cent of applicants now coming from networks.”