Advisers believe regulatory costs are more likely to have a greater impact on future adviser numbers than any of the new rules implemented under the Retail Distribution Review (RDR), according to new research from Tenet.
Advisers were canvassed for their opinions via a series of roadshows and online questionnaires and as many as 86% said that, without government intervention, they feared the cost of regulation will force up to 30% of advisers out of the market over the next three years.
“The statistics are not entirely surprising,” said Keith Richards, Tenet’s distribution and development director, “especially given the current spate of negative publicity regarding Arch cru, Keydata and rising regulatory levies.
“Advisory firms are feeling increasingly vulnerable to unlimited risk and the knock-on effect this is having with regard to PI, the FSCS and regulatory costs. Many recognise that if the market continues to contract, the problem will be exacerbated: with a larger burden shared by a disproportionately smaller adviser population.”
Richards added: “In an effort to redress the balance, Tenet is maintaining a strong lobbying initiative and assisting adviser firms to make contact with their MPs, in a concerted bid to increase awareness at a central government level.”