22nd February 2011

Defaqto: 1 in 10 IFAs planning a move to restricted advice

1 in 10 IFAs planning a move to restricted advice ahead of RDR, according to Defaqto survey

A survey by independent financial research company Defaqto has found that 9% of IFAs are planning to move to a restricted advice model.     

Defaqto’s survey, which questioned 500 IFAs dealing in individual personal pensions, found that nearly 1 in 10 IFAs are looking to shift in this direction as part of their preparations for the RDR.    

With so much focus being placed on the issues of independence and the number of IFAs that may or may not exit the industry, less attention has been given to one of the other key options available to IFAs – the potential move to restricted advice. 

However, Defaqto’s survey highlights that a notable proportion of IFAs are now considering this move as a viable proposition. 

Matt Ward, Defaqto’s Wealth Management Consultant, said:

“The RDR debate has been dominated by questions relating to how many IFAs will remain independent and what proportion will leave the sector altogether. However, a forgotten aspect has been how many IFAs will comply with the RDR by moving to a restricted advice model.

“The results of our survey show that the penny is now dropping with advisers in terms of the need to engage with restricted advice propositions. Importantly, they also indicate that the initial negativity around the term ‘restricted’ is perhaps starting to subside as IFAs become aware of the realities presented by each option.

“We expect that the number of IFAs considering the restricted approach will increase further during 2011 and indeed that larger organisations will consider running with a dual approach, whole of market and restricted.”

Defaqto is committed to assisting IFAs with their preparations for the RDR and offers a range of bespoke services designed to smooth the transition, including: best advice panels; product education and research; and due diligence processes for those seeking to engage with wrap and discretionary fund management partners.

RDR