January 23, 2012
ORC International’s Investrack survey shows a widening gap between IFA and DAM opinion on Retail Distribution Review (RDR). With just a year to go until RDR comes into effect, the latest wave of ORC International’s Syndicated Independent Financial Advisor (IFA) and Discretionary Asset Manager (DAM) Benchmarking Survey confirms a continuing nervousness among IFAs.
RDR will take effect on 31 December 2012, and will require all advisers in the retail investment market to follow a number of new rules on pricing transparency, structure and professional standards. For most, RDR will require a total review of the business model they operate with.
The latest ORC International syndicated Investrack survey reveals that, as the deadline approaches, 20% of IFAs still feel they will have fewer customers as a result of RDR.
Further reflecting this feeling of IFA negativity, the latest survey also finds that:
- Only 11% believe they are likely to have a greater number of clients post-RDR
- Just 7% feel that RDR will provide them with more business and client opportunities
Exposing the widening gap between IFA and DAM opinion, DAMs are far more optimistic, with 25% positive that they will see increased business and amplified client opportunities. Furthermore, the survey reveals that 33% of DAMs maintain they will in fact have more clients as a result of RDR.
Hanya Dezyk, Research Director at ORC International comments:
“RDR has been firmly on the radar for independent advisors and investment firms for a long period of time, however there is still a sense of frustration among IFAs as to the impact these changes will have on their businesses. Many IFAs don’t have an actual business model in place to deal with this kind of regulation and will need to make some fairly drastic changes to meet RDR requirements.”
Backing this up, the survey also revealed that only 3% of DAMs maintain that they will need to change their client profile compared to 17% of IFAs.
Dezyk continues:
“Many DAMs already have a business model in place that can be easily adapted to the changes, so for them, RDR is essentially business as usual.”
About the survey
ORC International’s bi-annual syndicated Investrack survey gathers the views of IFAs and DAMs. The survey focuses on outlets placing at least £500,000 client investment business per annum. It works to track intermediary opinions of asset manager support, service and marketing. 265 face-to-face interviews were conducted with IFAs and DAMs between 11 July and 12 August 2011. The sample was provided by members of the syndicate.