59% advisers support RDR but one in four will quit, says survey
A poll of 322 advisers by NMG Financial Services Consulting revealed that 59% thought RDR would lead to increased professionalism, up from 38% last October.
Respondents expected consumer perception of financial planning and its appeal as a career to be boosted after RDR. A further 37% thought that adviser business models would be more viable although they expressed doubts about their ability to bridge the savings gap.
However, despite the overall improvement in sentiment, the intermediary sector remains sharply divided on the FSA’s reform project. Among advisers generating high levels of income from fees, 62% agreed with the direction of the RDR compared with just 28% of advisers who earned over 90% of their income from commission.
Although commission is the dominant method of remuneration (accounting for two thirds of payments to advisers), 47% of those surveyed approved the regulator’s wish to prevent providers from dictating commission levels.
More negatively, 23% said they would not move to diploma level and would stop being advisers, either going into sales or leaving the industry. On the upside, although only 30% held the diploma, those supporting RDR expressed willingness to take more exams.
Chris Smallwood (pictured above), chief executive of 2plan, said last month’s interim RDR report was a ‘triumph’ for advisers. ‘I think the RDR and the move towards higher qualifications will increase consumer confidence although I think we still think there is a way to go,’ he said. ‘Customer agreed remuneration is a good move, there should be no provider influence on advisers.’
David Burns, NMG director, said: ‘IFAs have got what they want in the RDR so I am not surprised that more of them favour the proposals. However, the big challenge will be for people to act on the principles of getting higher qualifications and changing their remuneration and I think they may not completely understand how difficult that will be.’