Most IFAs believe that they will have to review their business models to become more efficient as a result of the introduction of MiFID II.
So says new research from Investec Wealth & Investment which showed that 52% of advisers questioned believe that the additional regulatory and compliance demands will most likely force them to review and change their compliance functions, followed by fee structures (42% thought this) in order to provide greater transparency.
The figures also revealed that nearly 40% of IFAs believe that MiFID II will encourage them to de-risk their business by reviewing their level of professional indemnity cover. What’s more, just over 30% advisers think that a key outcome of this latest regulatory overhaul will be a drive among IFAs to outsource client portfolios to a discretionary investment manager.
The research also revealed how advisers are coping with Brexit. The first Brexit stat showed around a quarter of those advisers questioned reported that Brexit has prompted clients to take a greater interest in their portfolios. And that around half said clients are seeking more advice about how to protect their portfolios from post referendum market volatility.
Head of Intermediary Services at Investec Wealth & Investment Mark Stevens (pictured above) said: “MiFID II is the latest in a series of regulatory changes and it’s no surprise that it has prompted many IFA owners to conduct a root and branch review of how they run their businesses.
“For some adviser firms, MiFID II will act as a catalyst and lead them to create a more efficient business model. As part of this, we are likely to see more firms outsourcing their investment management requirements to specialist discretionary managers. This will provide them with the bandwidth required to grow their businesses in a post MiFID II world.”