Financial planner Chris Gilchrist says he expects a surge in companies offering offthe-shelf research on complex investment products to advisers who want to remain independent after the RDR.
Under the FSA’s new rules, independent advisers must research the whole of the market before making recommendations for clients.
Gilchrist says: “I think there will be a market for companies to supply research to advisers on particular areas such as venture capital trusts, enterprise investment schemes, exchange traded funds, European Sipps, unregulated collective investment schemes and third-way annuity products. I think companies will be set up to provide such research.
“These are big ticket items where advisers are going to be charging clients quite a chunky fee with large minimum investments, so paying for research is something that is going to be well worth doing as an adviser.”
Gilchrist says for these companies to be successful, advisers must have confidence in the quality of the research.
He says: “Research organisations will be up against Hargreaves Lansdown and Bestinvest, which conduct pretty good research. Advisers would need to convince investors that their analysis is of the same quality.”
Norwest Consultants principal Harry Katz says: “If you are going to be an independent IFA, you will have to have a broad personal knowledge about what exists in the investment sector, regardless of whether you outsource your research or not.”