Advisers look to fee-earning rather than commission

Independent Financial Advisers are turning to financial planning to survive the downturn.

Six in ten are now concentrating their efforts on financial planning, and the same proportion report an increase in the time spent talking with clients. Nearly one-third (30%) of IFAs now focus entirely on financial planning.
 
The finding emerges in a new report from Russell Investments and the Institute of Financial Planning.

The report ‘Examining Today’s Financial Advisory Business: Investment Approaches and Current Practice’ surveyed the investment approaches of financial advisers in the UK and the changes they have experienced as a result of the global financial crisis.

The report suggests that the move towards RDR has encouraged IFAs to shift their businesses away from commission-based models towards fees.

Despite the financial downturn, just over half of advisers say that client trust in them has increased and 15% say it has increased a great deal.

Peter Hugh-Smith, managing director of UK Private Client Services, Russell Investments, said: “This report highlights the need for advisers to regularly review their business model. As we come out of recession and face the challenges of RDR, IFAs are having to adapt their businesses to this brave new world.”

Nick Cann, chief executive of the Institute of Financial Planning, added: “That up to half of advisers have been able to increase client trust is a testament to their training and professionalism.”

The survey was conducted online with 161 IFAs.

www.financialplanning.org.uk