Are some of the mists clearing around the shape of the post-RDR market?

Certainly many commentators and industry chiefs are suggesting that more IFAs will ‘restrict’ than had been previously thought. At the sharp end of the market this concurs directly with what Space01’s own panel of IFAs has been telling us in our regular research sessions.

Of course, a few big IFAs have been saying they would restrict almost from the day the option was first suggested. Now there is a feeling, certainly among the smaller IFA businesses, that the bar in terms of spread of investments, and therefore the resulting costs, has been set too high for them to keep their independent status.

But what does this mean for providers as they design solutions for this possible new market reality? We think there are few things to bear in mind. First we don’t know the numbers yet. We are still working on the basis of educated guesses and admittedly a few public declarations. Second, a lot of advisers are still pretty determined to maintain something that looks whole of market or at least gives a reasonable choice to clients with plenty of freedom to switch funds and providers.

It may be worth considering whether an independent financial adviser, a restricted adviser with a lot of products and funds on the shelves, and a restricted adviser with a best of breed approach with a few or even a single offer for each product line, have subtly different needs.

IFAs and RAs, as they may become known, will want easy-to-use technology and well thought out design and marketing solutions which help them offer the best possible service to clients. They will expect providers to help them explain why a particular product – whether income protection, or a pension or an Isa – is for their benefit in an easily understood way.

For the moment it may be that the same fundamentals apply whatever the channel. However at some future stage, which may not be in the too far distant future, there will be a need to reconsider what is offered and whether the online journey for restricted advice will vary from that used by an IFA.

Remember the old adage – ‘fail to prepare, prepare to fail!’