Mifid could help advisers maintain good profit margins in the years ahead, according to Barry Neilson, chief customer officer at Nucleus.
Under the Mifid rules the end client must be presented with the cost of each of the services they receive, from advice and platform cost to fund management fees, whereas previously the end client was presented only with a bundled charge, covering all aspects of the service.
Mr Neilson said the fact the adviser usually has a closer relationship with the client than either the platform or the fund house, made it more likely that the adviser fee can be maintained over the other fees.
He also said advice firms can offer a diverse range of services and focus on the more profitable areas, which should help to protect margins.
Mr Neilson said: "It is well known that there are issues affecting the industry, with margin pressure.
"With increasing pressure on fees, fund houses, platforms and advisers are all tussling to maintain, or grow, their share of the overall pie.
"Our view is that the Mifid rules have changed the business models of advice firms.
"Different firms focus on different areas. Some of them focus on investment management, others on esoteric areas like will writing and others on general financial planning.
"When it comes to fees, it is well known that there is margin pressure in the industry, with the platforms, the asset managers and the advisers all trying to maintain business models.
"The segment best able to do with the Mifid disclosure rules is the one that is the one closest to the end client, and that is the adviser."
But Paul Gibson, an adviser with Granite Financial Planning in Aberdeen, disagreed somewhat, suggesting there would be increased pressure on adviser fees going forward.
He said: "The total cost of investing remains far too high for many.
"Clients are now discovering they are paying over 2 per cent to 3 per cent all in and not receiving a particularly good service or investment performance.
"We have experienced several new enquiries from new clients who are paying 30 to 50 per cent more in fees and receiving substantially less in the way of ongoing service.
"Mifid rules - while good in theory - have been implemented poorly but they are a marked improvement on what has [gone on] before."
Mr Gibson uses almost exclusively passive investment products, as he feels the cost of actively managed investment products does not justify the performance.
Meanwhile Mr Neilson warned the picture could be quite different for platforms, which are already struggling to stay profitable.
The Financial Conduct Authority has previously highlighted that platforms are unprofitable businesses on average.
In the interim report of its platform market study last July the regulator looked at a sample of 20 investment platforms and found larger firms tended to be more profitable than smaller ones.
Whereas eight platforms had "substantial" positive contributions to operating profit between 2013 and 2016, there were seven firms which had total costs significantly in excess of revenues, while the remaining five posted an operating profit close to or slightly above zero, it stated.
Data compiled by the Lang Cat in September showed the platform earning the highest margin on its assets was True Potential, which had a turnover of £47.57m and a yield of 0.89 per cent, making a profit of £21.3m in the year to 30 June 2017. The platform had assets under administration of £5.75bn.
Mr Neilson said: "There is no doubt that margins are squeezed for platforms, and many are not profitable.
"I think we will see some consolidation, but maybe not as quickly as people think. Consolidating platforms is fiendishly difficult.
"We have seen Aegon have issues with integrating Cofunds and a lot of Cofunds clients are not happy."
david.thorpe@ft.com
