Surviving in a post-RDR world

Surviving in a post-RDR world

Fears that Middle Britain would refuse to pay for independent-advice and become orphaned, creating droves of ‘advice-refugees’, are yet to be proven; however, recent consumer research does suggest a degree of this could occur.

The question on everyone’s mind is, “whether IFAs will start to ignore those with lower levels of investment?” “Are they turning their backs on Middle Britain in the process?” “Is this a missed opportunity?”

We spoke to over 200 IFAs to understand the post-RDR world from their point of view, and in particular, how they are responding to the challenges, how their businesses are shaping up, how their clients have responded and what they think the next twelve months will bring.


There are clearly still huge challenges ahead for IFAs.

How do you manage a profitable business against a backdrop of declining consumer confidence and the perception that you are not demonstrating value? With this sentiment coupled with the increased competition, surely it is inevitable that IFAs are feeling the pinch?

”IFAs are a resilient bunch!” said a well know figure in the provider space at a recent FSF conference.

Our research, conducted in late February 2013 shows that 46% of IFAs think their business will be better off in 12 months.

Some positive signs that advisers feel they can adapt to the new climate.

You can read the whole presentation that Opinium delivered at a recent Financial Services Forum here.

Our research demonstrates that there is a need for IFAs to put strategies in place to overcome challenges facing their businesses. They need to demonstrate confidence, meet consumer needs and provide tangible value to their clients/consumers.

IFAs are currently focusing on and growing viable client bases that will pay for financial advice today. However, they are exploring a modified tiered approach for clients with lower asset levels, such as limiting face to face contact and offering web based services. In the long run, smarter use of technology could create alternative price options and help attract back these advice orphans.

This will however clearly create advice refugees in the short term.

At the moment, it appears to be a case of wait & see…

In the words of one IFA:

“Many clients in this cost arena will choose not to take advantage of independent advice due to the perceived high cost. However in the long term we feel that this market will respond to a different price option i.e. non face to face internet based service that we are examining currently.?