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One in four IFAs won’t touch clients with less than £30k

One in four IFAs won’t touch clients with less than £30k

More than three quarters of UK advisers surveyed by Intelliflo said they are prepared to adapt business models depending on what is proposed in the Financial Advice Market Review.

The adviser management software provider spoke to 203 users of its Intelligent Office system during January, finding that 41 per cent welcome the review, which is looking at ways to bring advice back to the market.

A third would be prepared to adapt their business model to provide investment services to people with relatively low amounts to invest, while 44 per cent are open to adapting their business model depending on the outcome of the review and 22 per cent would not be prepared to adapt.

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Almost a quarter do not believe there is anything the government or the regulator can do to encourage them to work with clients who have less than £30,000 to invest.

However, 43 per cent would welcome a relaxation in regulations that would make it more profitable to offer advice to those with less than £30,000.

Intelliflo’s research indicated there are many advisers who are happy to service clients with fairly modest investment amounts.

More than half said they will accept clients with less than £50,000 available for investment, with more than a third saying they have no minimum requirement.

However, 44 per cent require a minimum of £50,000 and 15 per cent require in excess of £100,000 as a minimum amount.

When asked specifically about the potential return of commission - a move mooted by acting Financial Conduct Authority chief executive Tracey McDermott last month - 44 per cent of advisers were not opposed to a reintroduction.

More than a third said they thought it may be a good idea, but it would depend on which products it relates to and how it has to be implemented, while almost one in 10 said they thought it was a very good idea.

Just over a quarter said it is a bad idea for commission to be reintroduced and would be a backward step for the image of advisers.

Two thirds of respondents hope the review takes into account how much of a financial burden there currently is for advisers and removes some of it, while just over half hope it simplifies the way advisers can operate and allows for more flexibility in how advice can be given by advisers.

As for FAMR fears, 40 per cent are worried that its conclusions will make it harder for advisers to run profitable businesses.

Only 4 per cent suggested that it may be the last straw for them and will make them decide to give up being an adviser.

Nick Eatock, Intelliflo’s executive chairman, said: “I’m pleased to see that there is so much willingness to adapt, particularly in relation to technology.”

Mel Kenny, a Chartered financial planner with Radcliffe & Newlands, pointed out that advising those with less to invest is not so straight forward.

“It’s not a simply case of having a £50,000 minimum investment in order to make it worthwhile for the banks, but complexities such as the need for extensive knowledge of the benefits system through to the limited client capacity for things to go wrong makes it quite a specialist field – certainly far too specialist for the banks as they have realised.”