London, July 2012 - The latest analysis from MyTouchstone, the market leading IFA database, which is operated by Equifax’s Touchstone Financial Analytics, reinforces widespread views that IFAs are still being slow to change their business models in preparation for RDR.
Analysis of the IFA firms that participated in the MyTouchstone RDR survey in the first half of 2012 shows a steady increase in the number of firms that are RDR Ready. In Quarter 1 2012, 9.7% confirmed that their firm is already RDR Ready; in Quarter 2 this has increased to 15.3%.
But Neil Cunningham, Director & General Manager, Touchstone Financial Analytics, thinks this is still a relatively small proportion of the overall IFA market and he believes there could be a number of different factors contributing to why IFAs aren’t yet ready.
“Other data from our RDR Surveys in the first and second quarters of this year suggests that for a large proportion of IFAs, commission is still a key income generator. In Quarter 1 2012 our analysis showed that for 79.3% of IFAs, over 25% of their income is still generated by commission. In Quarter 2 this has only reduced slightly - to 74.4%.”
“We think this continuing dependence on commission could have a lot to do with the current economic climate. It might be the case that IFAs are holding out to the last possible moment to change their business model to charge fees rather than earn from commission.”
There also seems to be a hurdle in IFAs achieving the necessary qualifications. To be classed as RDR Ready, each participating firm must have at least one adviser qualified to QCF Level 4. In both quarters only just under 60% of IFA firms surveyed said that they had at least one of their advisers qualified to QCF level 4.
In both quarters just over 30% of firms surveyed said they have all their advisers qualified to at least QCF Level 4. In Quarter 1 2012, 55.3% of advisers said they are already QCF Level 4 Qualified and in Quarter 2 this had increased to 61.8%.
“With less than 6 months to go to the deadline, IFA firms really need to be focused now on what they need to change in their business to meet the new requirements”, concluded Neil Cunningham. “There is nothing wrong with a planned transition, making the necessary changes on or around the year-end deadline. But some firms may still have some planning to do, because actually there’s an awful lot of hard work needed in a very short space of time.”
In light of these figures, MyTouchstone is supporting their registered users by offering subscribers the opportunity to win a 6 module RDR Emergency Implementation Toolkit authored by Steve Billingham worth £725. This competition is also open to any IFAs who sign up to the MyTouchstone free service at www.mytouchstone.co.uk by the 10th August 2012.
More than 1,000 IFAs log on to the MyTouchstone database every month to upload fresh data, providing a valuable insight into IFA business make-up and qualifications and making it highly reflective of current market activity.
To find out more, customers can contact Touchstone on 01236 722 000 or email email@example.com
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Touchstone is the UK’s leading provider of strategic IFA intelligence to financial product providers, delivering powerful benefits to its users. It operates a shared investment product data exchange with information provided by over 90 of the UK’s leading financial services companies. It also operates the MyTouchstone database which is powered by the collective sales data of 77 major product providers, fund managers and platforms and inputs from thousands of IFAs to help IFAs understand how they perform compared to the other IFAs in their post area and across the UK.
Equifax Inc acquired US wealth data specialist, IXI, at the end of 2009. The IXI Corporation has been directly-measuring consumer wealth in the U.S. for the past 15 years.
The unique combination of Touchstone Financial Analytics and IXI is set to bring an unparalleled understanding of consumer wealth and purchase behaviour to the UK for the first time.
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