Perspectives on the IFA Industry – views from the Independent Voice Panel
Perspectives on the IFA Industry
We are the Independent Voice of the IFA and our research gives us a fascinating insight into the real divergence of opinion among IFAs and also reveals just how passionately they express their views.
The main divide these days is over the Retail Distribution Review ? the biggest reform of the IFA sector for many years, which has the goal of improving standards of transparency and professionalism in the sector through the implementation of, amongst other things, a new qualification standard and a fee-based payment model which means consumers will know exactly how much they are paying for advice.
Our research shows that IFAs are divided on their views of the impact of the RDR ? 35% believe that it will be beneficial but 44% feel that it will have an adverse effect on their position as an IFA. Whilst many IFAs have made good progress towards adopting the new RDR standards, some reject them outright, and we will be closely following their progress over the months and years ahead.
A major issue is the reticence of many IFAs, particularly the older generation in their 50s and 60s, to study for new qualifications at this stage of their careers, with many expressing the view that passing exams does not necessarily make you a good adviser. Many IFAs are concerned that the size of the industry will decline and this raises issues about how to entice new recruits into the industry. On the other hand, those in the pro-RDR camp argue forcefully that the the reforms will result in a more professional and transparent service to customers.
With the internet becoming many consumers’ first port of call for financial advice nowadays, it is becoming mandatory for adviser firms to have a web presence. We have also seen that some IFAs, about a fifth, are regularly using social networking tools such as LinkedIn to engage with their clients (although, on the other hand, some 63% of advisers consider social networking sites as an inappropriate means of reaching out to clients).
With a new coalition government and as we hopefully emerge from the recent economic crisis it will be fascinating to see how these developments impact on the IFA industry. In the run-up to the election we found that the vast majority of advisers (87%) expressed concerns that a hung parliament might have a negative impact on the financial sector, with particular worries about Sterling and the stock market. However now the new Conservative-Lib Dem alliance has arrived, perhaps more optimism will return?
Whatever happens, we at Opinium will be following developments every step of the way.
