Institute of Financial Planning chief executive Nick Cann says the RDR will make advisers more powerful in their dealings with platforms and fund managers but warns some networks and nationals will struggle to survive.
Speaking to Money Marketing at the IFP annual conference in Newport this week, Cann (pictured) says there has been an interesting shift in the dynamic between platforms, fund managers and advisers.
He said: “Financial planners and advisers will have far more power to work out who they want to deal with and how post-RDR. Advisers have been changing their business model and gaining power because as they move more money onto platforms, they have the ability to move it off quickly as well.”
Cann says well capitalised businesses that are clear on their service proposition stand to gain from any bid to buy distribution next year but networks and nationals that have run sustained losses may not be able to continue for much longer.
He says: “The network model grew up on gathering lots of small, entrepreneurial guys looking to do a good job for their clients but who needed some help with regulation and structure. The business model was to create higher commission levels and take a percentage of commission. But how does that work with adviser charging?
“There have been significant amounts of money spent by the life companies and everyone else in protecting or accessing distribution to put commission deals in place in terms of training and support, technology support or any other service propping up businesses but with no obvious value. It will be interesting to see how those models survive and grow in the new world.”
Cann says the FSA’s increased scrutiny of how firms are complying with inducements and RDR rules will not help businesses that are already struggling.