Majority of IFAs remain positive on impact of RDR
The majority of intermediaries believe the Retail Distribution Review had a positive impact on the UK retail financial services industry, a new study by Investec Wealth & Investment has found.
Despite the challenges involved in implementing RDR, which took place two years ago, three in five (61%) intermediary businesses have grown since its introduction of which 13% reported significant expansion.
Of those that have grown, 39% of IFAs said they achieved this organically, 30% believed it was through focusing on writing more profitable business and 26% suggested it was by using a more efficient business model.
Despite nearly two thirds (64%) of intermediaries admitting that their knowledge about their investment sector have improved since RDR, advisers estimate it will take over three years on average for them to fully adapt to the new environment.
Mark Stevens, head of intermediary services, Investec Wealth & Investment, said: “Two years on, advisers are broadly positive about the impact of RDR, are better qualified, with most advisers saying that their businesses have grown as a result of the new regulations largely due to becoming more efficient and profitable.
“While the signs are encouraging, the research suggests there is a transition period and it will be a little while before all advisers fully adjust their business models to the new world.”
The RDR has inevitably resulted in a number of intermediaries changing the way their business operates.
The majority (52%) said they have developed a more structured approach to managing client relationships, while 51% have introduced a fee-based charging structure.
A third (34%) of intermediaries has increased their use of technology to improve efficiency.