Good news for Brokers

02 December 2013

RDR helps point Investors to Advisers

Recent research conducted among a cross-section of UK shareholders by Equiniti, the UK’s largest share registrar, highlights good news for professional advisers as 33% of shareholders say they are more likely to seek investment advice from a professional adviser post RDR. Pre RDR the figure was only 25%.

When asked where shareholders were most likely to seek investment advice the responses were:

  • Friends and family: 11% (Pre RDR), 9% (Post RDR), -2% (Difference)
  • Professional advisor: 25% (Pre RDR), 33% (Post RDR), +8% (Difference)
  • Financial press: 35% (Pre RDR), 35% (Post RDR), Stayed the same (Difference)
  • Online media29% (Pre RDR), 23% (Post RDR), -6% (Difference)

But while 5% of respondents said the RDR has changed the way they seek advice, despite its best intentions to increase transparency in transactions between advisers and investors, 68% of investors don’t yet know what the RDR is. 21% said that while they were aware of the RDR, it has not changed the way they seek investment advice.

Mark Taylor, Managing Director of Equiniti Investment Services at said: “Early indications are that the RDR is having a positive effect in building trust between investors and advisers, with many saying that they are seeking advice from them. Yet, it is clear that the RDR is still not having the full impact that it could and there is clearly more work to do in helping investors understand the RDR and the resultant regulation.

The research also highlights the concern over availability of advice. The number of investors looking to financial advisers has gone up while estimated figures from the Association of Professional Financial Advisers suggest there are around 20% fewer advisers in the market than in 2011, despite a recent but modest rise. If the number of investors seeking support from advisers continues to increase the ‘advice gap’ could worsen considerably. Investors may be forced to look to alternative sources of advice and information, which would not support the objectives of the RDR.”