Indeed, as Barry Neilson, business development director at Nucleus has said: “Increasing transparency around fees post-RDR means that many advisory firms will need to widen their client propositions, or risk coming under price pressure.”
It is in fact the case that advisers are going to be put under more pressure from clients to both perform and justify their fees, but, likewise, they should be putting more pressure on DFMs to justify their own performance.
And, this is where the change needs to occur. As David Gurr, the founding partner of due diligence consultancy, Dimiminis said: “It is not just the IFA’s that need to spend more time on scrutiny, industry wide there needs to be a better understanding of how the two parts work together.
“Increasing transparency around fees post-RDR means that many advisory firms will need to widen their client propositions, or risk coming under price pressure.
“With this in mind, the relationship between the adviser and the client has the potential to be more fragile from a remuneration point of view. It is therefore essential that firms ensure they don’t have weaknesses in any major elements of their propositions, so we would encourage advisers to carefully consider the risks attached to all significant forms of outsourcing,” Gurr said.
