Towry says its decision to offload smaller investors will be replicated by a swathe of other firms as the RDR forces a reassessment of client banks.
Defending the decision to close the accounts of 6,000 clients holding less than £5,000 in assets, Towry says smaller investors will be better served by banks and predicts other firms will follow its lead as strategic reviews are undertaken ahead of RDR.
"We have done a strategic review as part of the TCF initiative and an important part of this is making sure the service you provide is relevant to the people you are serving," says head of marketing Peter Foster. "So we have written to those clients with under £5,000 saying what we do is not economical for them."
Foster, who acknowledges the decision to part with these clients is part of a shift to the HNW market, says other companies will follow suit and predicts RDR will drive smaller investors into the banking space.
"We think we are maybe the first to do this and there will be more people in the market doing so," he says.
"The RDR is pushing companies to conduct strategic reviews and ensuring your service is tailored to your customer. More companies will realise the service they offer is not suitable to all their customers."
"Basically, the RDR suggests if you are a small investor you will be best served by banks."
Towry's target market are investors with £100,000 or more in assets, says Foster, although he stresses this is the total amount available for investment and does not all have to be tied up with Towry. The firm's average portfolio in its discretionary service is £250,000.
Some industry figures have speculated RDR will drive advice upmarket and create a number of so-called "adviser orphans" not willing or able to pay for advice.
Foster concedes the RDR could lead to lower-end investors being disenfranchised from financial advice.
"There will be people who will not be getting advice post 2012. Are we adding to this? Indirectly maybe, but the numbers are not significant."
Around 40% of clients who received a letter from Towry last week notifying them their accounts were due to close have responded, with the majority reacting "broadly positively" to the decision, says Foster.
He adds the overwhelming majority of those respondents want to cash in their assets, with only a few wishing to transfer to another company.
"Of those who have written back, around 99% have said give us a cheque and we have only had a few who want to transfer assets."
Clients wanting to transfer will be charged £20 per line of stock. Foster says the fee is an administration charge and points out clients are not charged if they transfer to cash.
Some of those investors who received the letter from Towry last week are former clients of Edward Jones, which Towry acquired in October 2009.
Towry has experienced a number of problems transferring assets belonging to former Edward Jones clients but Foster denies new requests from its smaller investors will make the situation worse.
"The clients affected by our letter are not just Edward Jones clients but old Towry clients as well," he says. "Also, most people who received our letter are going to cash in their investments."
On the subject of the transfer saga involving former Edward Jones clients, Foster stresses Towry has "thrown a lot of resources" into efforts to sort out the problem, including doubling the size of its administration team to 45.
He thinks Towry's problems with its transfers have highlighted a wider industry issue and underline the need to develop a synchronised re-registration system.
Foster says there are lessons to be learnt from the transfer debacle.
"We have been honest in saying we got caught out by the numbers but we now have a larger team to deal with this and have been in constant dialogue with the FSA throughout."
He adds other companies have also had issues with transfers.
"We are not the only company with an administration backlog - but we have been the most documented."
Have Your Say: Will you be following Towry's lead?
Good governance v resources
UCITS rules need changing
Old age dependency ratio ‘outdated’
Scope for change post-Brexit
To tackle liquidity issues