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Tenet: 80% of IFAs need to widen advice range

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.”

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  1. I agree that a very large proportion of firms do not currently advise on the full range of products to be included in Retail Investment Products after RDR, this is coming through clearly in the Aim Two Three Big Survey, but many of those firms do not have clients for whom the full RIP range will be relevant. So whether they need to change their business or simply introduce processes which allow them to ‘consider’ those products if relevant clients come to them is the actual question.
    It’s just another aspect of the total confusion caused by the FSA electing to define advice services by reference to product sales!

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