New Rules For Financial Advisers

PRLog (Press Release) - Sep. 23, 2012 - With effect from 1st January 2013 IFA’s (Independent Financial Advisers) will no longer be able to draw commissions from customers. These new rules are being introduced under the Retail Distribution Review (RDR).  Instead, IFA’s will only be able to charge on a fee basis – very much like an accountant or solicitor. Under the commission basis payments are made (which can be worth thousands of pounds) on the sale of various life insurance, pension or other investment policies.
This change is likely to have a significant impact on an industry already under pressure from changes in recent years. There are presently close to 50,000 people selling investment products in the UK which includes those employed by the banks and building societies. Around half of these operate as IFA’s, often as sole traders.
It is likely that for many of the smaller IFA businesses this will result in a sale or retirement and there will be fewer IFA’s in future. Inevitably this will result in the larger organisations surviving as smaller firms are taken over or go out of business.
Tim Corfield commented “Whether intended or not, this will leave much of the industry in the control of the banks and building societies and fewer people will receive financial advice in future”.

Written by Tim Corfield

http://www.griffinandking.co.uk