The RDR brings into question the current business model of IFA networks and, as such, these parties may undergo the biggest transformation within the new distribution landscape. Support Service companies who operate in the directly authorised IFA market will also be impacted, but many are already in a fee relationship with adviser firms.
Key areas that will need to be considered by IFA networks are:
- IFA networks will no longer be able to provide value through negotiating favourable commission terms with product providers.
- it will be administratively difficult to take a percentage of fees as there will be little visibility of the fees charged by advisers.
- the potential market of IFAs is likely to shrink in light of the RDR making the target market smaller.
- requiring IFAs to be professionally qualified may reduce the need for the support of networks on compliance issues.
Focus Solutions believes that IFA networks will have to start looking for other ways to ‘add value’ to their members and thereby retain them and their income. A significant move made by a number of network providers has been to look at providing a joined up technology proposition that includes Point of Sale, Back Office and Customer Relationship Management capability.
Focus Solutions can assist IFA networks with providing a multi-channel technology proposition for their members through focus:360° and focus:progress. Please select the relevant link below to find out more or contact us using our RDR contact form.
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