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FSA research: Only 12% of IFAs to go restricted

FSA Letters 480

Around 12 per cent of IFAs are likely to switch to offering restricted advice post-RDR, according to figures from the FSA.

The latest statistics from the regulator on adviser RDR readiness show that, based on a survey of 1,436 advisers, 66 per cent are currently IFAs and 34 per cent are restricted. Twelve per cent of IFAs say they are likely to offer restricted advice while 88 per cent say they will remain independent.

Only 1 per cent of restricted advisers say they are likely to offer independent advice.

As at Q3, 86 per cent of advisers were qualified to QCF level four or above, with a further 10 per cent either waiting for the results of their final exam or still studying.

Some 76 per cent of those polled held both a qualification and had completed any necessary gap-fill.

An FSA spokeswoman says: “We expect that the level of qualified advisers will increase further by 31 December.”

When advisers were asked what they intend to do after 31 December, 89 per cent of respondents said they will definitely or are likely to remain an adviser, 5 per cent intend to retire earlier than planned and either leave the industry or take up another industry role, and 1 per cent said they will retire as planned.

The latest figures on RDR readiness follow news yesterday that 63 per cent of advisers polled by the FSA are looking to retain clients with savings and investments of between £20,000 and £75,000, and 38 per cent of advisers plan to continue servicing clients with less than £20,000.

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Comments

There are 19 comments at the moment, we would love to hear your opinion too.

  1. 8% as at January 2013. How many by Dec 2013, and how many IFA’s left by Dec 2014?

  2. So another spin is…

    Nearly 1/4 of advisers are still not ready to apply for their mandatory SPS to keep in business from the end of next month….

  3. An FSA spokeswoman says: “We expect that the level of qualified advisers will increase further by 31 December.” – wow, I bet she was first in her class & clearly destined for the top-spot in the communications department of the new regulator!!
    Of the 92% of IFA’s remaining independent, it will be interesting to see how many different interpretations will emerge on how to document that independence & how many will hold up to regulatory scrutiny

  4. What a lot of negativity.

    This could be really great news for Independence and if just nearly true there will be a lot of red faces around. Particularly those who have fostered the myth that restricted is not so bad after all.

  5. Restricted is “not so bad” because its only “restricted” due to the FSA terminology.

  6. One feels that everyone is missing the point.

    ” the 1,436 advisers surveyed” – HOW MANY!!

    Surely that is not all that are left in the industry. Perhaps all that did not respomd are leaving, giving up with FSA authorisation or just wondering how they will maintain their business in 2013.

  7. Why would anyone choose to limit their offering to restricted? It is no more onerous to be independent, but does mean you can offer your clients what is more likely to be the best solution for them.
    How many restricted advisers will turn clients away because the best solution for them is now outside of their product/provider panel?
    Going restricted leaves you more likely to receive complaints as you will be recommending products from a smaller range – therefore the chances of all of your clients being satisfied (or one of those products being suitable) is much smaller, but we all know they will be recommended anyway!
    Since the FSA announced the final rules several months ago now, I fail to see why anyone has/is/or will choose to go down the restricted road.

  8. And 92% support he RDR!

    88% believe in the Easter Bunny and 79% will retire at 60.

    To read these and other stories like these please visit the childrens section of your local library

  9. The FSA should ask the numerous firms selling IFA client banks across the market what they feel will be the number of IFAs left in a years time. That would really be worth listening to and a lot more factual. Go on ask em……

  10. Sorry to criticise your maths – buts its not 8% – its 12% of the IFAs that are currently independent at the moment, which is 66%.

    So post RDR 59% will be IFA and 41% will be restricted if my adding up works. and that is according to the FSA….

  11. So, according to the results of this survey, as large a proportion as 96% of the current IFA population will by 31st December either be qualified or awaiting the results of presumably a December sitting of their final exam or aiming to get to the required level early in the new year.

    The way this data’s being spun, the IFA casualty rate from the RDR is going to be no more than a relatively trifling 4%. Is that it? Less than half the bottom of the FSA’s originally estimated range of between 8% and 13%, as quoted by Hector Sants before the TSC in March last year? Way, hey, it won’t turn out anything like as badly as all the naysayers have been predicting. We were right and you were wrong. Except……..

    What about all the IFA’s who’ve already gone or who intend to go this Christmas without bothering to qualify because:-

    1. they’re sick to death of regulatory persecution (whilst the banks have been allowed to get away with blue murder),

    2. endlessly escalating levies (no consultation about the MAS, was there?),

    3. increasingly unreliable PI cover (because of a never ending succession of hindsight reviews and the FSA short-circuiting the normal complaints process, as seen with ArchCru),

    4. a regulator that pretends it wants to engage constructively with the industry but in practice just steamrollers through its own agenda (all those sham consultations that are in reality nothing more than statements of intent),

    5. a near total lack of accountability on the part of the regulator and a unilateral opt-out from the Statutory Code of Practice for Regulators, about which nobody seems to be doing anything,

    6. the consequences of provider failures continually being dumped on the IFA sector (one additional FSCS levy after another),

    7. endlessly increasing red tape and bureacracy (20 pages to document a £10,000 investment),

    8. the increasing difficulty of making a reasonable profit servicing the needs of bread and butter clients (because the cost of the work involved outweighs what such clients are willing or able to pay).

    What about all the already qualified IFA’s who plan to drop out within the next 6 or 12 months (and there are plenty) because the environment in which they’re trying to make a reasonable living has become so toxic?

    Na, never mind all of that. We’re the FSA and we know that the RDR is the right way forward (in principle, even though we’ve made a pig’s ear of communicating and implementing it). You can’t make an omelette without breaking a few eggs, so get with the programme guys or get the hell out.

    4%, as far as the FSA is concerned, is an entirely acceptable attrition rate and, if it were remotely accurate, many might agree, provided that 4% is the rubbish corner of the IFA sector. But it probably isn’t and the percentage almost cetainly isn’t going to be as low as just 4. That’s just the way the FSA wants to spin it.

  12. Incompetent Regulators Award Team 20th November 2012 at 5:26 pm

    The FSA must employ ‘permanent liars’ to come up with this bullsh*t.

  13. As mentioned earlier !!! 1436 surveyed ?

    Well this should give us a balanced view then !!!

    Why do they continue to pee down our backs and tell us its rainning ?

  14. Whilst the FSA couldn’t predict rain in a thunderstorm I will make a fairly safe prediction. Five years from now there will be twice as many regulatory staff, being hugely overpaid to carry on wrecking the industry, and twice as many compliance staff making life a misery for the dwindling numbers of IFAs who haven’t gone out of business.

  15. Darren and DH.

    Do you understand statistics?

    A sample of 1,000 gives 95% certainty within a margin of error of 3.2% and 2,000 gives a margin of 2.2%. Unless there is any bias to the way the sample is drawn, it is going to be an outside chance it is not near to the mark.

  16. Harold’s Ghost

    Statistic’s (Lies, Damn Lies and statistic’s to misquote an old saying).

    It is you who miss the point. Those leaving the industry would be unlikely to respond, those planning to give up FSA authorisation would be unlikely to respond, those to busy studying and/or trying to get their business model together may not have the time to respond, those made redundant from the banks and busy looking for a job may not respond.

    So yes there may be a slight bias and that is the point made, especially when one reads elsewhere that there are supposed to be 27,000 advisers out there!

  17. @ Harolds Ghost

    Statistic’s can and are moulded to the outcome you want ! fact.

    Most are carefully conducted by asking the right people the right questions to get the desired outcome, fact !

    Don’t believe all you read, oh by the way Elvis has finished at the the fish and chip shop in Huddersfield and now drives a gritting lorry for Warwickshire county council.

  18. Darren

    I clearly provide the caveat in my comment “unless there is a bias..”, so I havn’t missed the point all. Your original crticism was only about the numbers and you are now side stepping.

    You may be correct in what your say about the data collection being flawed, but using that old canard (that may have been first said by Benjamin Disraeli or Mark Twain) and anecdotal evidence isn’t going to prove anything the facts are any different.

    Interpreting statitistics correctly does need human judgement but you cannot dismiss them just because they don’t provide you with the confirmation bias you are seeking.

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