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Seager predicts fifth of firms could close

The retail distribution review could kill off up to 20 per cent of the intermediary market, predicts Whitechurch chief executive Kean Seager.

Seager says customer-agreed remuneration will significantly reduce income in some parts of the advice sector. He says: “The RDR will kill off a lot of IFAs. Some deserve to be killed off and some do not. I think that 10 to 20 per cent of IFAs will go under version two of the RDR. It will accelerate the process of those taking retirement rather than businesses going bust.

“There are going to be fewer advisers around and consequently more clients per head.”

Seager believes the FSA needs to introduce tougher penalties against advisers who deliberately churn clients. He says: “This would help deal with the issue of commission bias and clear out the people who do not know what they are doing.”

On the wider global economy, Seager believes there will be a long road to recovery and reiterates the importance of taking a longer-term outlook on investments.

In view of current market uncertainty, Whitechurch is rearranging many client portfolios by shifting income funds into growth portfolios with an emphasis on the longer-term outlook.

Seager is particularly bullish on blue-chip companies in Bric countries, saying: “The stocks are viewed as risky but there is a great dichotomy between volatility and risk. We love China for the long term.

“Japan is also showing genuine signs of good corporate movement. We are neutral to negative on Europe.”


Clarity wanted on offshore changes

The Alternative Investment Management Association has called for greater clarity from the Treasury on its proposed overhaul of the offshore fund regime. It says proposed changes do not adequately simplify the current regime and could further burden the investment management industry.


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