- Advisers’ top concern is how to remain profitable post RDR (47%)
- Two fifths (40%) highlight changes to charging as a concern
- The new rules on legacy commission are also an issue for a third (34%) of advisers
According to the latest Adviser Barometer from Aviva, advisers’ main fear considering all future changes in the advisory market, is how to remain profitable in the new environment. Almost half (47%) of intermediaries surveyed highlighted this as a concern, followed by changes to adviser charging (40%), new rules on legacy commission (34%), how to generate revenue and recurring income (34%) and applying VAT to advisory charges (28%).
However, these concerns are not putting advisers off staying in the industry. Just 3% of intermediaries say they are unlikely or very unlikely to be trading by January 2013, the implementation date of the Retail Distribution Review.
In contrast, concerns about how to generate revenue and remain profitable are affecting advisers’ plans for future growth. Only a quarter (28%) say they plan to expand their business in the next three months, and similar numbers say they are increasing the number of advisers in their business (23%) or considering expanding by buying or merging with another advisory firm (22%).
The good news is that although most firms are not planning to expand, they are looking to maintain their adviser numbers or services offered with just one in 20 (5%) saying they are making staff cutbacks.
Andy Beswick, intermediary director at Aviva, says: “As advisers are overcoming other hurdles, such as achieving the qualifications necessary to operate under the RDR, unsurprisingly their attention has turned to how regulatory changes will directly impact their businesses.
“Changes to adviser charging, new rules on legacy commission and applying VAT to advisory charges are practical issues that will impact on a firm’s ability to generate revenue and recurring income – all of which feeds into generating the profit necessary to remain a successful business. We believe in the strength of the intermediary sector and remain dedicated to giving advisers the support they need to handle these challenges and maintain successful businesses.”