One in 10 advisers has yet to decide whether they will be independent or restricted, as the retail distribution review (RDR) deadline looms, according to the Personal Finance Society’s (PFS) annual survey of members.
The survey of 1,500 advisers found 63% planned to remain independent, 14% would be restricted and 9% had not made up their minds. Of the remaining advisers, 7% said they planned to offer a mixed model with mainly independent advice, and 5% a mixed model with largely restricted advice.
Paul Lothian (pictured), co-director of Dundee-based Verus Wealth, said he could not say definitely he would be independent after 31 December 2012 because he was not clear about the Financial Services Authority’s definition.
‘There is still a lot of uncertainty. A lot of people don’t really understand what they have to do to remain independent and how onerous that might be,’ he said.
‘We expect to remain independent because we don’t plan to change what we’re doing. If what we’re currently doing by default means we become restricted, then we haven’t changed, the definition has.
‘We’re not so precious about the independent tag. We believe there are other differentiators that are much more important. It’s about professionalism, the quality of your service and your proposition.’
Keith Churchouse, director of Guildford-based Chapters Financial, said he would remain independent but expected the number of restricted advisers to rise after the RDR.
‘[The number of restricted advisers] might be about right in the initial [aftermath] of the RDR, but over the course of 2013 and 2014 the number of independents will continue to fall until 2015, when it will level off,’ he predicted.
The research also showed a correlation between highly qualified advisers and those who planned to remain independent, with 72% of advisers at advanced diploma level planning to retain the label.
Fay Goddard, chief executive of the PFS, said: ‘Having an advanced diploma, you would have done more study and demonstrated more evidence of competence on more esoteric investments [making the independent requirements more manageable].’
Overall nearly 90% of the advisers surveyed considered themselves to be personally RDR ready but 21% felt their firms or employers were not prepared for life after 2012.
Of those advisers who felt their employers were not ready, almost three quarters said their firms had yet to implement new services, disclosure documents or adviser charging propositions.