Research conducted in mid-February by Skandia, part of Old Mutual Wealth, found 41.5% of advisers believe the Financial Services Authority’s initiative to overhaul the advice process will have a negative impact. Conversely, exactly the same percentage (41.5%) of the 491 advisers asked, said the RDR will have a positive impact, while 8.6% said it will have a very positive impact. A minority of 8.4% said it will have no impact at all.
The negative side effects of introducing such wide-sweeping, and generally positive, changes to the UK retail advice market, which includes raising the qualification requirements for advisers and moving to an exclusively fee-based model, have also been felt outside of the advice profession.
Just last week, Axa Wealth International blamed a slide in sales of its offshore bonds in part on the impact of advisers preparing for RDR.
Meanwhile Legal & General International, which released offshore bond sales figures to International Adviser today, said “RDR related distraction in the adviser community” had had a "significant impact on the UK offshore bond market over the year”. Sales of the product were down 11% year on year. To read more on this story click here.
Pressure justifying fees
In an accompanying statement, Skandia speculated that advisers are likely to be at different points in their “journey into the new fee paying world” and that those who are further into the process are likely to view the RDR in a more positive light than those “still evolving their commercial model”.
Skandia also asked advisers whether they feel under more pressure to justify their fees with clients and suggested that those advisers that do may feel more negatively towards the RDR.
The company found, while 40% of advisers said the pressure to justify fees had not changed post implementation, 38% said they did feel more pressure. Meanwhile, 23% said they felt little or no pressure at all when it came to justifying fees.
Mike Barrett, platform marketing manager at Skandia, said: “It is only natural that advisers have different perceptions on the RDR at this stage.
“We are still only a couple of months into one of the biggest changes the industry has ever seen, so it is bound to take time for businesses to adapt and evolve."
