Research with international financial advisers, carried out by Old Mutual International, part of Quilter, reveals that 60% of advisers say they are not concerned about full fee transparency, up from 54% last year.
The findings are published six months ahead of the proposed implementation of the Isle of Man’s new Conduct of Business Code on 1 January 2019. The new rules place greater emphasis on consumer protection and greater transparency, and advisers have been transitioning their businesses over the last couple of years.
The higher confidence levels suggest the majority of the sector is well prepared. Just eight percent of advisers remain “very concerned” about full fee transparency, with 29% “slightly concerned” and three percent remaining “unsure”.
Many financial advice firms recognise how this change can help provide better outcomes for customers and build value in their business. The research shows that almost half (46%) have already transitioned their business model to take less in upfront commission, with a further 11 percent in the process of doing so.
Overall 92% of advisers see the benefits of moving from full initial up-front commission to taking more on an ongoing basis. 63 percent of those agreed that moving away from upfront commission would help build better long term relationships with clients and 69% said that it will improve the value of their business.
Peter Kenny, managing director, Old Mutual International, said: “It is reassuring that confidence levels are growing as advisers embrace regulatory change and increasingly see it as a good opportunity for their proposition and for their clients. The research shows that more advisers are thinking about the advantages of building longer term relationships and embedding value in their business by moving away from upfront commission to an ongoing fee model.
“At Old Mutual International we are committed to helping advisers transition their business model through our Future Fit programme and our broad support offering.”
Old Mutual International’s adviser survey, carried out in June 2018, canvassed 180 respondents from the UK, Europe, the Middle East and Asia.