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Advisers able to take on Budget pension clients – but want to cherry pick pots

More than 80 per cent of advisers have capacity to take on new clients seeking pension decumulation advice following the Budget, Apfa research shows.

But the research, published yesterday evening, also found a fifth of advisers would not advise on pots below a certain level.

A report from Apfa on the impact of the RDR shows 83 per cent of advisers would be willing to take on more pension clients following the radical pension reforms announced in the Budget, based on a poll of 300 advisers.

However, 19 per cent said they would not advise on pots below a certain level and a further 50 per cent said they may turn down pots of a certain size depending on the specific case.

The research also found a third of advisers have seen an increase in clients in the past 12 months who had previously been advised by a bank or building society.

In addition, the survey found 72 per cent of advisers are confident they have developed their final operating model post-RDR, while 12 per cent gave a neutral response and 16 per cent said they were not confident they have developed their final model.

The report concluded the RDR has not met all of its objectives as it has failed to create a market which serves the advice needs of more consumers.

The latest FCA figures, published in January this year, show the number of financial advisers rose by 1 per cent between July 2013 and January, from 21,684 to 21,881. The number of advisers operating on the first day of the RDR was 20 per cent down on December 2011, from 40,566 to 31,132.

The number of bank and building society advisers has fallen from 8,658 at the end of 2011 to 3,556 in January 2014.

Apfa director general Chris Hannant says: “We hope the FCA will use this report as it prepares its post-implementation review of RDR.

“While there has been a small drop in adviser numbers, this report shows that the majority of firms have adapted successfully to the post-RDR world.

“However, there are still a number of advisers with serious concerns about whether they will be able to continue with their current business model given the significant costs of running an advice firm, and particularly the increasing cost of regulation.”

He says further regulatory change, such as upcoming measures for platforms and on capital adequacy, will also have a “major impact” on firms’ financial sustainability.

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  1. Was APFA requested by its membership to undertake this survey and do its findings serve any useful purpose?

    “We hope the FCA will use this report as it prepares its post-implementation review of RDR”. What if it doesn’t? It’ll have been just money wasted.

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