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Advisers say RDR has failed to increase consumer trust

Two thirds of advisers say the RDR has done nothing to improve consumer trust in their services, according to consumer website VouchedFor.

A survey of 223 advisers shows 65 per cent believe there has been no change to the level of trust clients clients have for advisers following the introduction of the RDR.

Just 21 per cent say clinets are more trusting of financial advisers since the new rules were brought into force on 31 December.

Furthermore, 50 per cent say there has been no change in consumer understanding of the difference between independent and restricted financial advice. Only 11 per cent say clients now have a better understanding of the different types of advice on offer, while 39 per cent say clients are more confused. 

However 58 per cent say clients are more aware of the different fee structures available, with just 12 per cent reporting increased confusion around remuneration.

Some 97 per cent of respondents say they have taken on new clients since the RDR came into force, with 31 per cent taking on between three and five new clients and 27 per cent taking on between five and 10.

Additionally, 85 per cent of firms say they have not lost any clients over the period. Among those who have lost business, just 6.8 per cent said it is due to DIY investing.

VouchedFor founder Adam Price says: “There have been a lot of assertions that DIY investing is booming as a result of RDR with the implication being that advisers are losing out. The reality is that there is no evidence to support this.”

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  1. Was the commission model really so bad, or was it abuse thereof that was in need of fixing? Customer Agreed Commission would surely have been a vastly less disruptive and more straightforward solution than scrapping it altogether.

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