What's the early verdict on RDR? According to research from Matrix Solutions, your peers are cautiously optimistic about the future. PA speaks to advisers to gauge their views…
The long-awaited introduction of the Retail Distribution Review (RDR) was met with a great deal of uncertainty: what effect would the regulation have on the IFA market?
To explore these issues, Matrix Solutions undertook a study of 400 advisers to find out their views on the launch of the RDR, and their predictions on the future state of the market.
More than half of IFAs (51%) expect the number of clients they serve to increase over the next year, according to Matrix’s poll, while just 27% reported that they expect a decrease in client numbers.
What’s the early verdict on RDR?
Furthermore, 42% of IFAs expressed a view that the RDR will benefit firms – many advisers said they believed the RDR would benefit those firms that were already operating a fee-based model, whilst also helping to ‘clean up’ the profession as a whole.
More than a quarter (27%) of the IFAs surveyed thought the RDR would benefit clients by providing greater transparency, clarity and disclosure, which in turn would lead to greater trust between advisers and clients.
Matrix’s results are borne out by the advisers Professional Adviser spoke to.
Dennis Hall, managing director of Yellowtail Financial Planning, said the RDR has been good for his firm and for the profession.
“It forces advisers to look critically at what they do and where they add value, which is a must if you’re asking clients to pay fees for your advice and services. It has meant that we have become much clearer about our client proposition and this has helped clients’ expectations about what we do and where we add value.”
Alex Morris, managing partner at Financial Relationships, agreed: “The main benefits of the RDR in my view have been to largely eradicate the poorer quality advisers by introducing some relatively basic exam standards.
“I and Financial Relationships will be around for a long time to reap the overall benefits and see this as the main positive change for us.”
But what of advisers who chose not to meet the RDR’s minimum qualification level – QCF Level 4?
Viv King, principal at VKPFA, used the RDR as a catalyst to move exclusively into protection, mortgages and lifestyle planning.
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