Advisors Rise To The Challenge Of The RDR - Zurich Survey

Stephen Little

20 September 2013

More than half of advisors have found the transition to the Retail Distribution Review smooth or very smooth, according to research by insurance firm Zurich.

The survey, which questioned 460 advisory firms via SurveyMonkey between 19 and 26 June 2013, found that since the introduction of the RDR in January 2013, only 9 per cent of advisors have reported major disruption to their businesses, while nearly a third of those questioned thought the new environment actually presented opportunities for growth.

This is despite 40 per cent of those questioned saying they had changed their customer charging structure significantly, with a further 20 per cent claiming this had involved a complete overhaul as they were not accepting fees directly.

Despite concerns within the industry of reduced access to advice as a result of the RDR and charging, over three-quarters believe their customers are either accepting, or very accepting of the new model. Additionally, 71 per cent are confident that their customers will continue to use their expertise for financial advice and planning in the future.

This confidence is also reflected in the responses to questions about the financial impact of the RDR, where 36 per cent of advisors surveyed do not believe it has had a negative impact on overall revenue so far.

However, 69 per cent think levels of regulatory costs on advisors are too high and do not reflect the risk an advisory business poses to consumers, with only a quarter seeing the costs as fair and proportionate.

"Though it is still early days since the introduction of the RDR, these findings paint a positive picture of agile advisors operating in a new and challenging environment. As business models and income streams are shifting, advisors are having to embrace new ways of doing business. It comes as no surprise to me that many are rising to the challenge – with nearly a third seeing the RDR as presenting new business opportunities," said Richard Howells, intermediary sales director for Zurich UK Life.

"We remain fully committed to the advisor market and to investing in supporting them. Our retail platform is just one example of how we are actively engaging with advisors and building their feedback into delivering a solution to help them operate even more effectively in this new world," Howells added.