The post-RDR ‘new world' of financial advice may be perfectly suited to alternative investments like Exchange Traded Funds (ETFs), according to Barclays Global Investors (BGI).
Nick Shellard, head of sales at iShares, BGI’s ETF arm, says the products are “underrepresented” in the current UK adviser market because they don’t pay commissions.
However, he says iShares remain “favoured portfolio building blocks” for many fee-based advisers and predicts they could thrive in a post-RDR arena.
"We feel the establishment of a clear delineation between advice and sales, creation of higher standards for independent advice, removing product driven commissions from independent advice, and increased financial literacy - Money Guidance - would be very positive developments for the end investor,” Shellard says.
“iShares are favoured portfolio building blocks for many fee-based members of the UK intermediary community, including private banks, private client managers, and independent wealth managers.
“However, not paying commissions to intermediaries has meant iShares are underrepresented in the current UK financial advice market - despite them being well suited to a high percentage of retail investors.
“We look forward to working with the UK intermediary community to navigate the period ahead and work towards providing better solutions to their end clients.”
Shellard points out that, in the US financial advice market, which operates in a largely fee based advice model, iShares has over $150bn in retail assets under management, representing over 60% of its assets in the US.
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