Financial Adviser - 10th September 2010 - Transition to fee-based model to take time, says poll

A survey from Matrix Solutions found that 60 per cent of IFAs believe that only half of their remuneration will come from fees even after 2012.

Ian Beaumont, chief executive of Matrix Solutions, said: “It is well-known that the market is moving to a more fee-based model. Over the next two years IFAs will see a progressive shift to fee-based operations.

“However by mid-2012, only 60 per cent of advisers predict that more than half of their business will come from fees. Therefore it will still be some time beyond 2012 before the fee model becomes completely dominant across the industry.”

Ruth Whitehead, principal for London-based Ruth Whitehead Associates, said: “Making the switch from commission to fees is really not that much of a big deal so I don’t understand why some IFA firms are resisting change and being dragged into RDR kicking and screaming come Janurary 2013.”

The research, which polled 350 advisers, aimed to gauge IFAs’ attitudes toward platforms and found that advisers who were already operating with at least a 50 per cent fee-based business model, were already using a minimum of three platforms.

Researchers for Matrix Solutions believe this suggests that fee-based IFAs are keen to explore platform usage compared with those who have predominantly commission-based business models.

The report also found that newly qualified IFAs are more willing to embrace the fee-based business model than those who have been working in the industry on a commission basis for some time.

The study also found that large firms are on average likely to be using at least one more platform than small firms - reflecting the greater resources of these firms in evaluating and deploying new technology.

Published on:10/09/2010