Tenet says 80 per cent of IFAs will have to change their business model to remain independent after the RDR.
Distribution and development director Keith Richards (pictured) says the vast majority of IFAs do not currently comply with the FSA’s new whole of market requirements for independent advisers.
He says: “In the true meaning of the new definition, it is likely that around 80 per cent of the independent market today will have to increase their advice range to meet the new requirements.”
Richards says advisers will find it difficult to remain independent due to higher operating costs and the increased CPD workload after the RDR and adds that many will look to a restricted model.
He says: “Many IFAs will choose to offer a restricted service because an independent model will offer little extra value to their clients.”
Barretts Financial Solutions senior partner Kim Barrett says: “I agree with the idea that 80 per cent of advisers will have to make changes to their proposition to remain independent but I think that more advisers than currently expected will choose to leave the industry rather than offer a restricted model.”
Pilot Financial Planning director Ian Thomas agrees that an independent service will not add extra value for a lot of IFAs’ clients after the RDR.
He says: “It is not important if an adviser is whole of market as long as they are providing quality advice that is valued by the client.”