A year into the regulatory overhaul, Evins, UK marketing director at the group, said moves such as those by the Solicitors Regulation Authority to allow their members to refer clients to advisers working within a restricted model would further encourage firms away from independence.
He said the anticipated mass exodus of small advisers from the industry had not happened and advisers were reporting higher levels of income.
Following the commission ban, the RDR has seen only a small number of clients act negatively towards paying for financial advice, according to JPMAM.
Greater polarisation
Higher qualification requirements, combined with the removal of commission payments, should encourage newly qualified graduates towards financial advice as a career of choice, he suggested.
Evins said as the industry evolved, it would see greater polarisation between investment specialists and holistic financial planners. He also predicted more segmentation between whole of market and restricted propositions, and between the types of services they offered.
He said the obvious detriment would fall to the consumer, as the pressure on efficiencies as people moved to a fee-based model would result in a narrower focus on wealthier clients.
“In this sense, consumers are the clear losers from RDR. Those with lesser or infrequent need to take advice are not as attractive to adviser firms and will go unserved. While this group of consumers has rightly been seen a significant business opportunity, in our view the industry will struggle to fully realise that opportunity because the cost and complexity of maintaining a client-facing offering,” he added.
