The relationship between IFAs and their clients is stronger than ever as new research from AIFA shows 30% of clients have been with their adviser for 15 years or more.
The survey of 466 clients also revealed 35% had been with an IFA for up to eight years.
However, many IFAs are worried RDR proposals, including new distinctions between professional and generic advice and increased professional standards, could spell doom for these long term relationships
Carterbar director Arthur Dornan says the adviser/client bond could be broken if the RDR qualification proposals are passed.
He says many advisers, especially those with more experience, may not be able to obtain the higher standard needed to allow them to continue working with their long held clientele.
“It’s the clients who will more or less suffer,” Dornan says. “I am all for improving professional standards, because it is better for the clients and the industry as a whole, but there needs to be something there that takes into account experience."
Dornan is calling on the FSA to show more flexibility on the matter.
“We have five advisers here and probably have about a combined 150 years in financial services,” he says.
“I don’t know how somebody who has just has passed all the exams could do a better job for clients than that.”
The survey also revealed almost 70% of clients have monthly to annually contact with an adviser, a figure Dornan says compares well to his firm.
Meanwhile, AIFA says its research shows consumers understand and value the term ‘independent’, with 96% expecting IFAs to be able to select whole of market products.
“Our research confirms what the Financial Services Authority already know – consumers associate independence with whole of market,” Cummings says.
“The RDR proposals that threatened to remove this link look like disappearing into the long grass.
“At a time when we are trying to increase access to advice and improve financial capability and education in the UK, the RDR should not have proposed compromising this?”
The survey also revealed one in three clients prefer paying commission remuneration, as opposed to just 7% choosing fees.
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From 6 April 2019
Marcus Brookes appointed CIO