St James’s Place, adviser networks including Sesame, Openwork, and Intrinsic, and Hargreaves Lansdown are set to emerge as the winners in the changing distribution landscape, according to research from Barclays.
In an analysts note, published this week, Barclays argues large advice firms and platforms are set to succeed post-RDR as fund managers lose control over distribution.
The report says: “Pre-RDR, the manufacturer determined how a typical 150 basis points annual management charge was divided up. In an unbundled world, this power appears to be shifting towards larger advisers and distributors.”
It estimates advisers’ share of the value chain will increase from 33 per cent to 48 per cent.
Among adviser firms, it pinpoints Sesame, SJP, Openwork and Intrinsic as the most likely to grow adviser numbers.
Barclays also says Hargreaves Lansdown is most likely to benefit from orphaned clients.
It says Hargreaves management has given analysts “clues” that pricing from next year will start at 70bps and fall down to 35bps. Money Marketing understands Hargreaves’ new pricing model will start at around 70bps.
But Barclays argues that “if funds can give up some of the economics to be included in a list that influence flows”, such as the Hargreaves Wealth 150, the regulator may intervene.
Arch Financial Planing managing director Arthur Childs says: “If fund groups and platforms are dealing with a client directly then a lot of the work the adviser would do is being lost. It is going to be more expensive than people think to deal directly with consumers and I think Hargreaves recognise that.”