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Three quarters of advisers prepared to adapt business model depending on FAMR outcome, says Intelliflo

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Over three quarters (77 per cent) of UK advisers are prepared to adapt their business models depending on what is proposed in the government’s Financial Advice Market Review (FAMR), according to research by adviser management software company Intelliflo.

Intelliflo surveyed adviser users of Intelligent Office in January and the results form part of its new FAMR summary white paper which is published today (15 February 2016).
 
Two in five (41 per cent) welcome the review but are concerned that it is being rushed.
 
A third (33 per cent) would be prepared to adapt their business model to provide investment services to people with relatively low amounts to invest.
 
The majority (44 per cent) are open to considering adapting their business model depending on the outcome of the review.
 
Around one in five (22 per cent) would not be prepared to adapt their business model.
 
Almost a quarter (24 per cent) don’t believe there is anything the government/the regulator can do to encourage them to work with clients who have under £30,000 to invest.
 
Around two in five (43 per cent) would welcome a relaxation in regulations that would make it more profitable to offer advice to those with less than £30,000.
 
Around one in five (21 per cent) would welcome a shift to imposing financial penalties on providers rather than advisers should problems arise with the performance of investment products.
 
Over a quarter (27 per cent) are unhappy at the way the government/the regulator keeps changing the rules about how advisers can run their businesses.
 
Some 44 per cent are not opposed to a reintroduction of commission. More than a third (36 per cent) said they thought it may be a good idea but it would depend on which products it relates to and how it has to be implemented and almost one in 10 (8 per cent) said they thought it was a very good idea.
 
Just over a quarter (27 per cent) said they think it is a bad idea for commission to be reintroduced and would be a backward step for the image of advisers.
 
Around a quarter (23 per cent) said they were unconvinced the reintroduction of commission would be in the best interests of consumers.
 
Two thirds (66 per cent) of respondents hope the review takes into account how much of a financial burden there currently is for advisers and removes some of it.
 
Over half (51 per cent) hope the review simplifies the way advisers can operate and allows for more flexibility in how advice can be given by advisers.
 
Almost a third (31 per cent) hope the review creates an opportunity for advisers to expand their businesses.
 
Over half (55 per cent) are worried that all the hard work required for the RDR will be wasted should a return to commission be announced in the review.
 
Two in five (40 per cent) are worried that the review will make it harder for advisers to run profitable businesses.
 
Almost two in five (39 per cent) are worried the review is being carried out too quickly.
 
Around one in 25 (4 per cent) fear that the review may be the last straw for them and will make them decide to give up being an adviser.
 
Intelliflo’s research indicates that there are many advisers who are happy to service clients with fairly modest investment amounts. More than half (56 per cent) say they will accept clients with less than GBP50,000 available for investment, with over a third (37 per cent) saying they have no minimum amount.
 
More than two in five (44 per cent) require a minimum of GBP50,000, with almost one in seven (15 per cent) requiring in excess of GBP100,000 as a minimum amount.
 
Nick Eatock (pictured), Intelliflo’s Executive Chairman, says: “There’s been plenty of speculation about what might happen as a result of this government review and advisers are naturally anxious about what regulations may be introduced that will once again affect the way they can do business. However, I’m pleased to see that there is so much willingness to adapt, particularly in relation to technology. The new simplified advice service, often referred to as robo-advice, we’re launching later this year will go a long way to helping them service lower resourced clients in a highly cost efficient way.” 

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