Research suggests that nine per cent of IFAs will make their investment advice for individual clients more focused on specific areas, rather than offering a whole-of-market package.
With so much focus being placed on the issues of independence and the number of IFAs who may decide to leave the industry, less attention has been given to one of the other key options available to IFAs - the potential move to restricted advice.
Source: Defaqto
The survey suggests a notable proportion of IFAs are now considering this switch as a viable proposition. Although nine per cent may seem modest, IFAs expect this figure to rise as 1 January 2013 edges closer.
Danny Cox, head of advice at Hargreaves Lansdown, says the company has offered restricted advice to clients for many years, and thinks an increasing number of IFAs will tailor their services in anticipation of RDR.
"I’m not surprised by this figure," he said. "Since margins will now be lower, many IFAs are looking for a simpler, more efficient process, so that turnover comes around that little bit quicker."
But Cox says the restricted-advice model has its merits regardless of RDR’s impact on the industry.
He commented: "Not every client wants the full package. Some will want advice on annuities, while others only need assistance with their pensions."
"I think it’s less about the impact of RDR, and more about tailoring a service to what the client wants."
Matt Ward, wealth management consultant at Defaqto, said: "The results of our survey show that the penny is now dropping with advisers, and that there is a need to engage with restricted-advice propositions."
"Importantly, they also indicate that the initial negativity around the term 'restricted' is starting to subside as IFAs become aware of the realities presented by each option."
"We expect that the number of IFAs considering the restricted approach will increase further during 2011 and that larger organisations will consider running with a dual approach: whole of market and restricted."