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Re-reg still an issue, says CWC Research

Over 50 per cent cent of advisers believe re-registration is still an issue when moving client money, a study by CWC Research shows.

The research, in association with BNP Paribas Securities Services, found that 35 per cent of advisers surveyed claim re-registration in specie assets is sometimes a problem, while 20 per cent said it often causes a problem.

Of those surveyed, 27.5 per cent said it rarely causes a problem, while 17.5 per cent said never.

Speaking at a press briefing in London yesterday, CWC Research senior partner Clive Waller said while a number of advisers now accept the issues that surround re-registration, there is a clear client detriment here because advisers may not move clients due to the costs involved. The average cost per client is between £600 – £1,000, said Waller.

He said: “This is totally unfair. The Office of Fair Trading should be saying that should not be allowed. That needs to be dealt with and going forward that is very important for an adviser’s business.”

The research also showed that the number of advisers who prefer automatic rebalancing has dipped because advisers are “suspicious”, said Waller. Advisers now prefer semi-automatic or manual rebalancing.

The survey also shows that Cofunds is first choice of platform for advisers, while Standard Life was named second choice. Fundsnetwork slipped to third place, to sit alongside Skandia and Transact.

Transact was ranked top platform when considering administration capability, functionality, scope of products and charges, scoring 4.2 out of 5. Fundsnetwork scored the lowest overall rating of 3.4 out of 5.

When picking a platform, 28 per cent of those polled said ease of administration is the key benefit, followed by 27 per cent claiming one page aggregation. Twenty four per cent  said efficiency, 14 per cent said proposition and price, and 11 per cent said reporting.

Of the advisers surveyed not one wanted multiple share classes. Fifty per cent believed the adviser should be paid via a cash fund, 20 per cent said by fund manager rebates leaving 30 per cent without a preference. Nearly 70 per cent said the platform should be paid by the customer and 10 per cent by rebates. 

On using more than one platform, nearly 80 per cent prefer just one and 22 per cent preferred multiple platforms.

Waller said: “Using one platform is much cheaper, and very simple.”

In RDR research, CWC found just 10 per cent of bank advisers are on target for QCA level 4 by 2012. However, 75 per cent of benefit consultants, 65 per cent of nationals, 32 per cent of networks and 20 per cent of franchise advisers are on track to meet RDR qualification requirements.

Waller estimated a loss of around 20 to 40 per cent of advisers as a result of the RDR. He warned the RDR in its current form fails to meet its original objectives, adding: “The big problem is it doesn’t address the vast majority of people. Unless you have got money it is no damn good. This is a big worry.”

He added: “The qualifications being demanded has no relevance to the original RDR objective. It is unreasonable to ask 60-year-olds to take a new set of exams. Qualifications will cause disruption, distraction and disappointment.”

Delegate at the briefing, Aifa director general Chris Cummings said: “The lack of development on qualifications has been breathtaking.”

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