Over three quarters (77%) of UK advisers are prepared to adapt their business models depending on what is proposed in the government’s Financial Advice Market Review (FAMR), according to research1 by adviser management software company Intelliflo.
Intelliflo surveyed adviser users of Intelligent Office in January and the results form part of its new FAMR summary white paper which is published2 today.
Key findings of the survey include:
- Two in five (41%) welcome the review but are concerned that it is being rushed.
- A third (33%) would be prepared to adapt their business model to provide investment services to people with relatively low amounts to invest.
- The majority (44%) are open to considering adapting their business model depending on the outcome of the review.
- Around one in five (22%) would not be prepared to adapt their business model.
- Almost a quarter (24%) don’t believe there is anything the government/the regulator can do to encourage them to work with clients who have under £30,000 to invest.
- Around two in five (43%) would welcome a relaxation in regulations that would make it more profitable to offer advice to those with less than £30,000.
- Around one in five (21%) would welcome a shift to imposing financial penalties on providers rather than advisers should problems arise with the performance of investment products.
- Over a quarter (27%) are unhappy at the way the government/the regulator keeps changing the rules about how advisers can run their businesses.
Commission
- 44% are not opposed to a reintroduction of commission. More than a third (36%) said they thought it may be a good idea but it would depend on which products it relates to and how it has to be implemented and almost one in 10 (8%) said they thought it was a very good idea.
- Just over a quarter (27%) said they think it is a bad idea for commission to be reintroduced and would be a backward step for the image of advisers.
- Around a quarter (23%) said they were unconvinced the reintroduction of commission would be in the best interests of consumers.
Biggest hopes about the outcome of the review
- Two thirds (66%) of respondents hope the review takes into account how much of a financial burden there currently is for advisers and removes some of it.
- Over half (51%) hope the review simplifies the way advisers can operate and allows for more flexibility in how advice can be given by advisers.
- Almost a third (31%) hope the review creates an opportunity for advisers to expand their businesses.
Biggest fears about the outcome of the review
- Over half (55%) are worried that all the hard work required for the RDR will be wasted should a return to commission be announced in the review.
- Two in five (40%) are worried that the review will make it harder for advisers to run profitable businesses.
- Almost two in five (39%) are worried the review is being carried out too quickly.
- Around one in 25 (4%) fear that the review may be the last straw for them and will make them decide to give up being an adviser.
Intelliflo’s research indicates that there are many advisers who are happy to service clients with fairly modest investment amounts. More than half (56%) say they will accept clients with less than £50,000 available for investment, with over a third (37%) saying they have no minimum amount.
More than two in five (44%) require a minimum of £50,000, with almost one in seven (15%) requiring in excess of £100,000 as a minimum amount.
Nick Eatock, Intelliflo’s Executive Chairman comments: “There’s been plenty of speculation about what might happen as a result of this government review and advisers are naturally anxious about what regulations may be introduced that will once again affect the way they can do business. However, I’m pleased to see that there is so much willingness to adapt, particularly in relation to technology. The new simplified advice service, often referred to as Robo-advice, we’re launching later this year will go a long way to helping them service lower resourced clients in a highly cost efficient way.”
1 Survey carried out with 203 adviser users of Intelliflo Intelligent Office between 18-29 January 2016
2 FAMR: Feast or Famine for IFAs is available to download free at Feast or famine for IFAs
For more information please contact Jo Rimmer at Redspark PR on jo@redsparkpr.com or call 07970 088383.
Notes to Editors
The Intelliflo FAMR survey results in full:
- How do you feel about the government/the regulator getting involved in trying to open up the advice channel for people with relatively small amounts of money to invest?
- Two in five (41%) welcome the review but are concerned that it is being rushed.
- Over a quarter (27%) are unhappy at the way the government/the regulator keeps changing the rules about how advisers can run their businesses.
- One in 10 (11%) of those surveyed wholeheartedly welcome the review.
- There is speculation that regulations around commission for investment products may be relaxed to allow advisers to help open up the advice channel for the less wealthy. What is your view on this?
- Just over a quarter (27%) of the 203 advisers who took part in the survey said they thought it was a bad idea for commission to be reintroduced and would be a backward step for the image of advisers.
- More than a third (36%) said they thought it may be a good idea but it would depend on which products it relates to and how it has to be implemented.
- Almost one in 10 (8%) said they thought it was a very good idea.
- Around a quarter (23%) said they were unconvinced the reintroduction of commission would be in the best interests of consumers.
- What could the government/the regulator do to encourage you to do more business with clients with relatively small amounts to invest?
- Almost a quarter (24%) don’t believe there is anything the government/the regulator can do to encourage them to work with clients who have under £30,000 to invest.
- Around two in five (43%) would welcome a relaxation in regulations that would make it more profitable to offer advice to those with less than £30,000.
- Around one in five (21%) would welcome a shift to imposing financial penalties on providers rather than advisers should problems arise with the performance of investment products.
- Are you prepared to adapt your business model to provide investment services to people with relatively low amounts to invest?
- A third (33%) would be prepared to adapt their business model to provide investment services to people with relatively low amounts to invest.
- The majority (44%) are open to considering adapting depending on the outcome of the review.
- Around one in five (22%) would not be prepared to adapt their business.
- What are your biggest hopes for this review?
- Two thirds (66%) of respondents hope the review takes into account how much of a financial burden there currently is for advisers and removes some of it.
- Over half (51%) hope the review simplifies the way advisers can operate and allows for more flexibility in how advice can be given by advisers.
- Almost a third (31%) hope the review creates an opportunity for advisers to expand their businesses.
- What are your biggest fears for this review?
- In terms of fears, over half (55%) are worried that all the hard work required for the RDR will be wasted should a return to commission be announced in the review.
- Two in five (40%) are worried that the review will make it harder for advisers to run profitable businesses.
- Almost two in five (39%) are worried the review is being carried out too quickly.
- Around one in 25 (4%) fear that the review may be the last straw for them and will make them decide to give up being an adviser.
- Currently what is the amount a person needs to have available for investment before you will accept them as a client?
- More than half (56%) will accept clients with less than £50,000 available for investment, with over a third (37%) saying there is no minimum amount before they would accept someone as a client.
- More than two in five (44%) require a minimum of £50,000, with almost one in seven (15%) requiring in excess of £100,000 as a minimum amount.
About Intelliflo
Intelliflo (www.Intelliflo.com) has been providing information technology services to financial services companies since its formation in 2004. Its leading web-based business management software, Intelligent Office, helps financial businesses large and small to improve efficiency and increase profits. Intelligent Office supports over 1,600 firms and 14,650 users with assets under advice of £243 billion (as at 31 December 2015).
In July 2013 HgCapital, a leading European private equity investor in B2B technology companies, became a majority shareholder in Intelliflo Ltd. HgCapital has a wealth of expertise in developing web-based software businesses and is committed to supporting the next phase of Intelliflo’s growth.
In March 2015 Intelliflo was listed among the top 25 best performing privately owned technology companies in the UK mid-market. The list is compiled by Megabuyte’s independent and highly-regarded research team and is based on financial performance and long-term potential.
