A ban on pre-Retail Distribution Review (RDR) trail commission threatens to make business unsustainable for nearly half of advisers, according to research from GfK and Panacea Adviser.
A survey of 433 UK financial advisers found 46% agree that "any regulatory ban on trail commission agreed prior to the introduction of RDR would make my firm's business unsustainable".
Panacea Adviser chief executive Derek Bradley (pictured) said a ban "could finally sound the death knell for the vast majority of the adviser market".
The Financial Conduct Authority (FCA) raised concerns over the lack of an end date for the payment of trail commission as recently as June and has since published guidance on how investors can stop paying it.
GfK divisional director for life, pensions and investments Martin Grimwood said, although the results of the survey suggest a majority of advisers would cope with the loss of trail commission, advisers needs more time to adjust to the introduction of the RDR in January this year.
He said: "If the FCA were to move on the issue of trail commission agreed prior to the introduction of RDR - as is widely anticipated - before financial adviser firms have had time to execute their post-RDR business plans, even those least exposed to trail commission would struggle to cope with the loss of revenue.
"While 54% appear to be able to weather any loss of trail commission, this is not an endorsement to ban trail commission."
Bradley added: "This is a hugely serious matter and suggests that stopping trail commission, far from aiding and clarifying the provision of financial advice, could finally sound the death knell for the vast majority of the adviser market.
"With so many advisers clearly concerned about the sustainability of their exit plans should trail commission be removed, the regulator needs to consider long and hard whether this is a wise, or even fair, change in regulation."
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