Taxbriefs Commentary Library

How prepared is the IFA sector to face the future?

David Lee, 29 May 2012


IFAs are making strong progress in the dash to meet the Retail Distribution Review (RDR) deadline, as shown by the latest results from an IFA benchmarking study sponsored by Standard Life and threesixty services. When asked, most respondents felt they were more than 80% ready for RDR.

Checking this claim against the RDR Readiness Factors identified by Taxbriefs and Money Marketing, the survey found that although there was an over-estimation of RDR readiness, it wasn’t by much. In the key areas such as advisers being Level 4 qualified, developing a formal service proposition, changing processes to fit the proposition and modelling the impact of the changes, the findings were all around the 80% mark. Areas that needed attention were, perhaps unsurprisingly, around the final implementation – such as adviser training and confidence with the new proposition, client segmentation and a customer implementation plan.

However IFA firms shouldn’t be put off fully implementing their plans. Of the 64% who had spoken to clients about their new proposition, half had a 100 per cent success rate in converting clients to fees and of the rest, most had a greater than 50% success rate.

The level of fees charged for initial advice was also interesting, with many IFA firms charging below the much vaunted 3% initial advice fee. For pension transfer advice the average initial charge for advice was 2%, for investment advice it was 2.5% and for income drawdown it was 1.72%. The averages hide the wide range of fees stated by the participating firms, but the most common charges were 1% for both pension transfer and income drawdown advice and 2.5% for investment advice.

The IFA benchmarking remains open at the moment for firms who would like to participate and compare themselves to the survey average. Finding out how well you think you are doing and what areas may need attention could be the best way to make sure you’re on the right track.

To get involved, please send your name, email address and company name to You will then be given secure access to the survey.


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David Lee

Director, Cimetric

David Lee is director of Cimetric Limited, a firm specialising in business intelligence. 

Cimetric have created a bespoke benchmarking survey for IFAs, to allow business owners to monitor their progress towards the RDR deadline and understand how they compare to other firms in the market across a wide range of factors including costs, revenues and productivity.


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