The managing partner of London-based financial services consultancy Harrison Spence, said he believed “margin pressures” would push advisers towards the restricted label, despite the “laudable” aim of 74 per cent of firms who wished to retain their independent status.
Citing research of more than 100 IFAs by the firm, which also revealed that 15 per cent of advisers intended to become restricted during the next 12 months, and an additional 6 per cent within three years, Mr Spence warned that remaining independent and profitable may not be possible for all firms.
He added that many firms were not operating efficiently enough, with 62 per cent of advisers stating that they continued to work as they always had done without segmentation, and 22 per cent reporting they had to turn clients away.
He said: “An enterprising 16 per cent of advisers have found alternate ways to keep serving lower clients. Segmentation is essential for those firms that want to create a solid foundation.
“Getting a comprehensive view of your client base may well also reveal new growth opportunities. Lighter touch offerings for lower value clients are going to be essential for protecting profitability.”
Adviser View
Keith Iles, director of Middlesex-based the JHC Partnership, said: “My firm was RDR-compliant 12 years ago, and we decided on our proposition and understood our client base back then. I do not think the independent or restricted labels are relevant anymore as advisers should be judged on their ability and experience.”
