By Maximilian Clarke
89% of Independent Financial Advisors are optimistic about the future, with just 4% reportedly likely to leave the marked by 2013, Aviva research suggests.
The Retail Distribution Review (RDR), as outlined by the Financial Services Authority, serves to protect consumers by introducing regulations to boost transparency and reduce the possibility of deliberate mis-selling.
But changes introduced in the RDR threaten to result in significant loss of business for independent financial advisors (IFAs) who do not implement changes necessary to accommodate new legislation. Aviva’s research found that more than two thirds of IFAs have begun altering their business plans in order to accommodate the RDR.
However, advisers still have concerns about how they will run their businesses post-RDR. The proportion of intermediaries worried about profitability has increased from 31% (May 2011) to 40% (September 2011) as the deadline looms while concerns about gaining further qualifications have fallen from 38% (June 2011) to 35% (September 2011) as greater clarity around training has emerged.
“The Retail Distribution Review is one of the biggest changes we have seen in the financial services arena for many years,” said Dean Lamble, director of distribution development at Aviva. “Therefore, the signs that intermediaries are not just meeting the challenge but also using it to as an opportunity to future-proof their livelihoods is great news.
“The commitment to recruiting new staff and investing in aspects of their businesses shows that despite the current economic climate, they have faith in the potential of the market and consumers’ desire for good quality financial advice. The form this advice will take depends on the type of consumer and many advisers are looking at segmentation of their client bases to address specific needs. The use of technology will be integral to the development of robust IFA businesses in a post-RDR world and we are keen to understand how we can help advisers with this challenge.
“Indeed, we recognise that we need to work closely with financial advisers to help them adapt and develop their businesses. The Aviva Adviser Barometer is a proactive tool for gathering regular feedback from advisers and enables Aviva to provide practical guidance and technical support to advisers, which we do through our website Aviva for Advisers and our support programme ‘Achieve it with Aviva’. Together they give IFAs the information, support and secure product functionality they need, when they need it.”
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