Financial advisers and investors are struggling to prepare for the imminent impact of new regulations under the Retail Distribution Review (RDR), according to a recent survey.
From January 2013, investment advice will become fee-based, replacing commissions advisers previously received from product providers. However, the BlackRock commissioned survey found 61% of advisers said they did not feel prepared for RDR, with 87% saying they had not finalised future client propositions.
57% said they were unsure of the impact their adviser status – being ‘independent’ or ‘restricted’ – would have on their businesses. However, 68% of advisers believed that it would be more important to become either a chartered or certified financial planner than an IFA over the next five years.
Advisers also felt that clients are not ready for RDR, with just 12% believing clients are aware of the implications the new regulations will have on the availability and nature of investment advice.
“With under 130 days until RDR takes effect, many advisers and investors are still wrestling with what the new regulations will mean and how they should act,’ said Tony Stenning, head of UK retail at BlackRock.
“Some advisers are clearly racing to complete the minimum required qualifications, but this is potentially drawing their attention away from transitioning their businesses and communicating potential changes to clients.”
The survey of 88 advisers was conducted by The Ideas Lab and NMG on behalf of BlackRock on 2 July 2012 at BlackRock’s ‘RDR: Preparing for the final straight’ client seminar.