The post-RDR IFA market is going to look considerably different. Will there be many of today’s IFAs here to witness the change?

Transitions taking place amongst small and medium-sized IFA firms, as a result of measures demanded by the FSA’s Retail Distribution Review (RDR), are now well underway. But feedback from Reed Insurance jobs clients in this sector indicates that a sizeable number will simply close up shop when implementation becomes mandatory in 2012. Some industry experts have gone on record as saying that as many as 30% of IFAs will cease trading, selling their client banks on to IFAs of a similar size, or to the major players.

Finding fresh blood: a growing challenge

The implications for those firms that remain in the market are clear. Many fear that it will become harder to find people who want to provide independent financial advice, as firms get squeezed out of the market.

Changes to reward and remuneration structures mean that, while commission elements may be largely eliminated and basic salaries driven upward, earning potential will be reduced overall.

Sales-focused advisers with a hunger to maximise their earnings may leave the profession altogether for less heavily regulated sectors, while graduates might be attracted by the glitz of volume recruitment campaigns already being waged by blue chip names on the high street.

There is one glimmer of hope – because of the introduction of basic salaries, talented people currently working in the bancassurance market may be keener to explore opportunities with IFAs.

Via EPR Network
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