RDR prompts adviser ‘surge’ to outsourcing, survey finds

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More than half of IFAs plan to increase their use of discretionary fund managers for client portfolios now RDR has come into force, Investec Wealth & Investment research suggests.

The firm’s poll of 263 intermediaries found that 70 per cent of IFAs are actively outsourcing some of their client portfolios to a third party manager – which is up 10 per cent on the number doing this in 2011.

Furthermore, there has been “a surge in appetite” towards outsourcing over the six months since RDR, the study suggests. Some 52 per cent of IFAs intend to increase the number of portfolios they will outsource to a DFM over the next year.

In contrast, only 20 per cent of IFAs were planning on doing this before RDR was implemented.

There has also been an increase in how much of the portfolios is being outsourced, with this number rising by five percentage points to 16 per cent since the onset of RDR.

Investec Wealth & Investment head of intermediary services Mark Stevens says: “As we anticipated last year, RDR has signalled a flight to quality among advisers looking to build strong links with DFM partners.

“We have seen a sustained increase in both the quantity and quality of our DFM partnerships over the past 12 months and we firmly believe this trend will continue.”

The research also found that 53 per cent of IFAs have focused on consolidating their existing client base since the onset of RDR, while 9 per cent have attempted reduce the number of clients to focus on quality and profits.

Only 38 per cent have attempted to attract new business, Investec Wealth & Investment adds.