Skandia says the tax wrappers themselves will survive, due to their beneficial tax status. But it adds that modern product structures, such as those offered by fund platforms, will benefit most because they offer pricing structures that can easily adapt to adviser charging requirements.
The practicalities of implementing adviser charging may be difficult for traditional life companies who have admin systems that can only handle outdated product structures, according to Skandia.
It says these providers are going to have to dedicate “significant resources to system changes which could have an adverse impact on product development and service provision”.
Skandia chief development officer Peter Mann says: “The principles of adviser charging are sound but the practicalities of how to implement the changes will not be straight forward for some product providers. I think it is important that the industry realises that the responsibility for ensuring adviser charging is implemented efficiently does not just lie with financial advisers.
“Product providers need to get their own systems in order and provide as much support to advisers as possible. This may require providers to deliver tools and educative material to help advisers compare their charging structures to the rest of the market and articulate them clearly to clients.”