The Retail Distribution Review (RDR) has exacerbated a polarisation of the advisory market, with an almost even split of firms forecasting growth and those predicting static or declining revenues over the next three years, research has suggested.
Almost half (47%) of 100 advisers polled by national group Foster Denovo said they expected their firms to grow between now and 2016, while 45% expected business to either contract or remain flat over the period.
Foster Denovo said it was concerned that eight respondents believed they would cease trading in the next three years, a figure which, extrapolated across the entire UK advice market, would mean some 1,700 advisers exiting the industry.
Darren Laverty, sales and marketing director at Foster Denovo, said: "It is concerning to see that such a large segment of our industry predicts their business will fail to grow over the next three years. Equally, the 8% figure would equate to circa 1,700 advisers in today's market, taking us to below 20,000 financial advisers."
More than one third (38%) of those questioned said discussing fees with clients had proven a challenge, while 47% said they felt it will be difficult to spend chargeable time in front of clients.
However, 37 respondents said they believed that RDR has been positive for their firm, with only 18 stating that it had posed a significant challenge.
Roger Brosch (pictured), CEO at Foster Denovo, said: "The sector has come a long way over the last eight months, but there is still some way to go. It is positive to see that more than a third of advisers have seen profit increases post-RDR, but it seems that - as I predicted at the onset of the year - it will be the most adaptable that survive and prosper in this new world."
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