RDR will knock 40% off some adviser incomes

Wage_cutUK financial advisers that charge less than £100 (€120) an hour, nearly a quarter of UK advisers, stand to lose 40% of their income when the retail distribution review (RDR) bans saving and investment product commissions. Advisers that charge more per hour rely less on commissions, said CoreData Research, which produced the report based on 1,126 responses from advisers. The 10% that charge more than £200 per hour stand to lose less than a quarter of their income when the RDR comes into force in 2013, it said. “In an environment of banned initial 
commissions these advisers could try to either raise their pricing for delivering client advice to make up the shortfall or seek more clients to maintain income levels – a huge challenge in this market,” said Angele Spiteri Paris, senior consultant at CoreData Research. She added that advisers could offer more insurance products to clients to increase income. “The whole of the advice community needs to change in the face of RDR, but some just have a much more difficult climb ahead of them,” she said. ©2012 funds europe

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