• Yet 90% are ‘confident’ their firms have the necessary expertise to make changes
• 36% looking to increase the number of portfolios outsourced in view of RDR
Almost half (43%) of financial advisers do not feel confident that the industry has accepted the need to make fundamental changes to its business models to survive the changes imposed by RDR, according to new research from Heartwood, the independently owned investment and wealth manager. When asked about their own practices, however, IFAs were more positive, with 90% of those questioned positive that their firm had the expertise to make the required changes.
As the deadline of 31st December 2012 approaches, Heartwood believes that outsourcing through a Discretionary Fund Manager (DFM) or Investment Manager will be advantageous for many IFAs, allowing them to concentrate on the advice and planning process. Heartwood’s research found that this was where advisers believed their clients derived most value from their relationship with an adviser, with 38% specifying the advice process and 36% the development of a financial plan. This was followed by help with articulating goals (31%).
The research further revealed that outsourcing is already widespread amongst IFAs, with almost half (43%) already outsourcing their client portfolios to a DFM and a further 13% of advisers intending to do so. Among intermediaries who already outsource to a DFM, over a third (36%) plan to increase the number of client portfolios managed by a third party.
Mark Rockliffe, Head of Intermediary Sales at Heartwood Investment Management said: “The research clearly shows that IFAs are confident that they will be able to make the changes needed to survive RDR, but are more sceptical about the ability of the industry as a whole. A significant proportion of advisers are looking to outsource their client portfolios to a DFM or Investment Manager, and we expect that the onset of RDR will stimulate the market even further. Importantly, financial advisers and planners are increasingly outsourcing the investment management for more portfolios, and are looking for a solution across their client base. This allows advisers to focus on cultivating relationships with clients; while outsourcing to an investment manager can deliver the disciplined investment management process that can help to streamline an adviser’s business and increase scalability.”
Heartwood is a multi-award winning boutique investment management firm with £1.48 billion of funds under management and administration (as at the end of September 2012).
Heartwood delivers a consistent investment approach through tax-efficient funds, models and via a full discretionary service, offering financial adviser firms a business solution for all their clients. With a global, multi-asset investment style, Heartwood offers a choice of investment strategies designed to suit a range of risk appetites. Since their launch in December 2009, Heartwood’s comprehensive selection of Multi Asset Funds has attracted more than £668 million of funds under management in total, over 51% of discretionary assets under management and 91% of discretionary clients.
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