Aviva predicts the proportion of advisers providing independent advice is set to fall dramatically post-RDR with IFAs accounting for just 13 per cent of the market by 2015.
Speaking at the Marketforce Impact of the RDR conference in London this week, Aviva RDR implementation manager Ross Anderson set out Aviva’s forecasts on how distribution will change over the next three years.
Anderson believes the proportion of the market delivering independent advice will fall from 70 per cent in 2009 to 50 per cent in 2013, before a further fall to only 13 per cent in 2015.
He believes the proportion of the market offering restricted advice will go from 23 per cent in 2009 to 40 per cent in 2013, before increasing to 75 per cent in 2015.
For the direct market, Aviva’s estimates are that it will grow from 7 per cent in 2009 to 10 per cent in 2013 and 12 per cent in 2015.
Anderson said: “There is a wide range of different views on how big independent versus restricted will be.
“I have put up a provocation here to say that if you are looking at independence strictly from the regulator’s definition, that is going to be potentially a very small part of the market, both in terms of regulatory censure but also in terms of the cost of providing independence.
“Whether it is termed as restricted whole of market, or restricted multi-tie, this could well be the market norm with chartered status potentially becoming the differentiator from the customer’s point of view.”
Anderson also estimates there is a 30 to 40 per cent difference in time saved in delivering restricted advice compared to independent advice.
He said: “If you go through the advice process based on the purest description of independence and a complete review of the market, compared to a restricted multi-tie environment, the difference of time saved for the advice process is significant.
“There is a 30 to 40 per cent time difference unless technology comes in to support the review process.”