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Over 40 per cent of IFAs believe RDR has improved the quality of advice

As RDR approaches its first anniversary, more than four in ten (43 per cent) intermediaries believe that the new regime has improved the quality of advice they provide to clients.

Just five per cent say it has had a negative effect, the study by Investec Wealth & Investment reveals.
Despite many misgivings ahead of the introduction of RDR, one year on the majority (59 per cent) of advisers believe that it has ‘improved’ or ‘significantly improved’ their levels of knowledge about the investment sector.
However, when asked to rank the biggest challenges RDR has had on their businesses, advisers cited the costs they have incurred and maintaining levels of profitability.  In third place was the cost of professional indemnity insurance, followed by the transition from a commission to a fee-based approach.  Despite the concerns expressed by many in the run up about passing QCF Level 4, this was ranked the fifth biggest challenge.
IW&I’s research also underlines the role RDR has played in the continued growth in popularity of partnering discretionary fund managers (DFMs): one in four (23 per cent) have already increased or plan to increase the number of client portfolios outsourced to DFMs compared to just three per cent who plan to reduce the number.  Furthermore, over half (53 per cent) of respondents believe that increasing numbers of advisers are now outsourcing to DFMs and over a third (37 per cent) think that bespoke portfolio options are most commonly selected compared to 24 per cent who favour other models.
Mark Stevens, head of intermediary services, Investec Wealth & Investment, says: “This research strongly indicates that advisers are positive about the impact RDR has had on the industry; many are now better qualified, more knowledgeable and their clients have benefited as a result. 
“One year on, the overriding challenge posed by RDR has been the financial costs involved with transforming their business models and the impact this had had on their profitability.  This has translated into consolidating and in some cases reducing client bases in favour of driving profitability.  We expect that over 2014 the focus will shift back to growing their businesses.”

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