More than two fifths of intermediaries believe that independent advisory practices will review their fee structure to provide greater transparency ahead of the pending changes under MiFID II, according to an Investec Wealth & Investment study.
In addition, more than half of the 94 intermediaries who took part in the survey of IFAs are likely to comb through their business model to become more efficient so they can weather the upcoming regulatory and compliance changes under the EU directive.
The research also found that almost four-in-10 intermediaries said IFAs could seek to de-risk their business by reviewing their level of professional indemnity cover, for example, while a fifth of respondents stated MiFID II will have little effect on their firms.
Mark Stevens, head of intermediary services at Investec Wealth & Investment, said: “MiFID II is the latest in a series of regulatory changes and it’s no surprise that it has prompted many IFA owners to conduct a root and branch review of how they run their businesses.
“For some adviser firms, MiFID II will act as a catalyst and lead them to create a more efficient business model. As part of this, we are likely to see more firms outsourcing their investment management requirements to specialist discretionary managers. This will provide them with the bandwidth required to grow their businesses in a post MiFID II world.”
Another notable finding of the research centres on Brexit – with 24 per cent of the survey claiming the EU referendum has prompted clients to take a greater interest in their portfolios.
Adviser view
Tony Larkins, managing director at Cambridgeshire-based Beacon Wealth Management, said: “I do not see why there would an issue on fee transparency, especially following the Retail Distribution Review. I would have though that every advisers are very clear of the changes under MiFID II.”
