Many UK financial advisers are already RDR ready, according to the latest Aviva Adviser Barometer. Two thirds (66 per cent) of advisers have already achieved QCF4 with a further two fifths (18 per cent) expecting to do so by the end of the year.
An additional 13 per cent are new to the industry or expect to achieve their qualifications in 2013.
Almost half (46 per cent) of advisers already have their Statement of Professional Standing (SPS) with a further third (33 per cent) expecting to gain their SPS by the end of 2012. Many are also going above and beyond the statutory requirements with a tenth (10 per cent) already qualified to chartered status.
Advisers are also making changes to their charging structures, with those who have made decisions about their structure predominantly charging for their advice as a percentage of initial investment or funds under management (96 per cent). The average initial charge will be three per cent.
According to advisers, technology has dominated industry innovation in recent years. When asked unprompted what has been the most important or significant innovation in recent times, advisers overwhelmingly pointed to technology, with platforms most cited (31 per cent).
Large numbers of advisers are already using technology for research (94 per cent), submitting applications (87 per cent), viewing policy information (86 per cent) and getting valuations (85 per cent). Three fifths (60 per cent) of advisers say they have adopted new technology recently, ranging from new back office or client relationship management (CRM) systems, to platforms and software from networks or product providers. Newer advances such as cloud computing, social media and tablet/mobile apps were also cited.
Advisers are identifying where they can improve business efficiency with an increased use of technology (20 per cent) the most cited way to bring about changes. Responses focussed on the speed brought about by new technology, with many pointing to the internet in streamlining processes for valuations, submissions, tracking and research. Tablets and smartphones, back office systems and electronic trading also earned praise for saving time.
Consequently, a quarter of advisers plan to either significantly increase (five per cent) or increase (20 per cent) their use of technology over the next year. The most cited area in which advisers intend to increase this use is back office systems, but advisers also say that they intend to make greater use of CRM systems and other client-facing technologies, such as using tablets in client meetings. Greater use of platforms, using technology for lead generation/marketing and research, and reducing the use of paper were also highlighted.
Financial challenges dominate advisers’ current key concerns. Remaining profitable was the top adviser concern 12 months ago and remains so today (44 per cent). Professional indemnity costs (42 per cent), regulatory fees and levies (42 per cent), changing to adviser charging (36 per cent) and how to generate revenue and recurring income (31 per cent) round out the top five concerns.
Looking forward to 2013, advisers see their main challenges stemming from the changes brought in by the RDR – adapting to adviser charging, educating their customers about the changes, maintaining or increasing their revenue and profitability, and simply understanding and complying with regulation in general. Advisers are also worried about economic uncertainty and volatility, and how in this environment they can attract and retain clients.
Andy Beswick, intermediary director at Aviva, says: “As the RDR deadline looms ever closer, it is really positive to see advisers going beyond the minimal requirements for RDR and raising the bar for industry standards. However, there are still a number of advisers who are working to complete their qualification and obtain their SPS so it is important they are fully supported through this final push.
“Technology is seen as the key to improving efficiency in adviser businesses. Whilst it may not directly address the financial challenges advisers see coming in 2013, ensuring that firms are well equipped and running efficiently will stand them in good stead to face future issues.
“Aviva offers a range of support for advisers, including business evolution to help steer businesses through RDR and on into the new world with both the challenges and opportunities it presents.”