General Insurance Article - Advisers on track to being RDR ready

• Number of advisers intending to leave the industry is lower than expected
• Advisers are already implementing their new charging structures
• Advisers are advancing their preparations for other regulatory changes alongside RDR.

 According to the latest Adviser Barometer from Aviva, with less than six months to go advisers are well on track to be RDR ready.

 Adviser exit levels are lower than expected
 Back in January 2009, the Aviva Adviser Barometer showed that almost two fifths (37%) of advisers were thinking of leaving the industry ahead of 1st January 2013. This level has now dropped dramatically with just 3.4% expecting to leave the industry by the end of this year.

 With the number of advisers intending to leave the industry starting to plateau, the results of the latest Barometer reveal that the industry is embracing these changes. Advisers are shaping up to ensure they are fit for service in the new era with many quick off the mark in already being RDR ready.

 Forging ahead with adviser charging
 Advisers are already thinking about how they will implement their charging structures with more than half (51%) expecting the majority of clients to make their fee payments through provider facilitation. Only a sixth (15%) anticipate payments through a platform account whilst a further sixth (15%) are intending to take two separate payments – one for advice and one for the product. However, 16% still do not know how their customers will want them to facilitate adviser charging post RDR.

 Flexibility remains key, as advisers look to offer a range of charging structures giving clients the choice that they prefer. Whilst 18% intend to offer fees as a percentage of the initial investment and 18% are looking to offer percentage of funds under management, three fifths of advisers (60%) are expecting to adopt a mix of these options. A third (32%) are intending to operate a fixed fee approach with just over a quarter (27%) implementing an hourly fee.

 To RDR and beyond
 Whilst RDR has dominated industry talk in recent years, there are other milestones on the horizon which require preparation. Capital adequacy requirements will not be fully enforced until December 2015, so it may still be a little early to tell, but initial indications are positive. Encouragingly, half of advisers (50%) are already meeting the FSA’s capital adequacy requirements whilst a further three in ten (29%) already have plans in place to ensure they will meet the requirements. Just 9% are not aware of the requirements.

 Andy Beswick, intermediary director at Aviva, says:
 “We haven’t yet seen advisers exit the market to the levels previously predicted, this is good news as it means professional financial advice will remain more accessible to more customers.

 “Advisers do face greater challenges though and getting past the RDR deadline is only the start. The industry is adapting but there is a real opportunity to go one step further and embrace change.

 “We are passionate about helping advisers serve clients both now and in the future. Advisers who take the time to ensure they make the right choices for their customers now are on track to succeed in the new world.”

 Aviva offers a range of RDR support for advisers from handy guides to business evolution advice. For more information please visit

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