Mifid IIFeb 14 2017

Mifid II will see restricted advice rise: advisers

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Mifid II will see restricted advice rise: advisers

Nearly half of advisers in the UK expect Mifid II to have a negative impact on the financial advice industry and the majority believe it will lead to an increase in restricted advice.

A study by CoreData Research surveying 612 advisers found 45 per cent think the incoming regulation will negatively affect the advice sector.

Just 17 per cent expect Mifid II to have a positive impact and 38 per cent expect its impact to be neutral.

Craig Phillips, head of international at CoreData Research, said: “Our research shows that while nearly half of advisers expect Mifid II to have a detrimental impact on the overall advice industry, a similar number are unsure or unaware of how the regulation will affect them on a personal level.

“This hints at a certain level of unpreparedness on behalf of some advisers and, with the implementation clock ticking, those advisers not up to speed should get their skates on.”

Mifid II, which is due to come into effect in January 2018, introduces a number of rules which impact advisers.

Most notably, the Financial Conduct Authority is considering expanding its taping policy to cover advisers to comply with the European rules.

The rules also require distributors, including advisers, to pass information to providers to ensure investment products are being sold only to specifically targeted markets

More than half (52 per cent) of those advisers polled expect to see advisers move from independent to restricted in the post-Mifid II world.

The study revealed Mifid II cost and client disclosure requirements are the biggest concern for advisers.

A large majority (86 per cent) say getting clients to provide up-to-date information to meet Mifid II requirements will be challenging, while 82 per cent cite the monetary costs of additional administration and compliance as a challenge.

CoreData Research surveyed 612 advisers between October and November 2016.

damian.fantato@ft.com