A survey by independent financial research company Defaqto has found that Retail Distribution Review (RDR) implementation is likely to have an impact on the type of business that financial advisers transact.
According to the survey, financial advisers expect that the proportion of business focused on tax wrapped investments is likely to fall from 21% to 13% in 2013. In addition, while retirement income is expected to play a lesser role from next year – with an anticipated fall from 14% to 6% of business – employer pensions are likely to experience the greatest increase in significance for advice firms (growing from 6% to 16% of business undertaken).
Area of business
|
Proportion of business Pre RDR implementation
|
Proportion of business Post RDR
|
Area of business
Individual pensions |
23% |
21% |
|
Employer pensions |
6% |
16% |
|
Retirement income |
14% |
6% |
|
Tax wrapped investments (excluding pensions and retirement income business) |
21% |
13% |
|
Non-tax wrapped investments |
16% |
20% |
|
Health insurance (Income Protection, Critical Illness, Private Medical Insurance) |
5% |
7% |
|
Life assurance |
13% |
14% |
Fraser Donaldson, Defaqto’s Insight Analyst for Funds, said:
“One of the key challenges facing advisers as they prepare for RDR implementation is deciding on the service proposition they plan to offer from 2013. Interestingly, our research has identified a potential shift in the type of business that advisers expect to focus on in the new distribution era, which suggests that change may be on the horizon.
“Whichever product mix or advice proposition a firm chooses to offer post-2012, it is clear that the RDR’s rules will demand a new standard of advice, with unbiased and unrestricted being centrally important – and access to robust and whole of market research will be at the heart of meeting this requirement.”
The RDR Zone on Defaqto’s website provides unbiased analysis, commentary and insight to support advisers as they prepare for 2013 and beyond: www.defaqto.com/adviser/rdr.
Defaqto’s adviser research tool – Engage – supports professional, efficient and compliant advice. It provides whole of market financial product and fund information to support advisers’ research and selection in both these areas. Engage also helps advisers with platform selection and generates reports for compliance and regulatory purposes.
Defaqto also provides bespoke consultancy services for advisers to support, amongst other things, platform and DFM due diligence, fund and product panel construction and paraplanning.
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