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Will MiFID II lead to an IFA business model overhaul? 

October 26, 2016

Rozi Jones, Financial Reporter

Advice firms are likely to review and change their compliance functions and fee structures and de-risk their businesses in light of MiFID II, according to Investec Wealth & Investment.

Its research found that 52% of advisers will review compliance, and 42% will overhaul their fee structures in order to provide greater transparency. Almost four-in-ten (38%) intermediaries believe MiFID II will encourage IFAs to de-risk their business by reviewing their level of professional indemnity cover, for example.
 
According to nearly a third (31%) of advisers, a key outcome of this latest regulatory overhaul will be a drive among IFAs to outsource client portfolios to a discretionary investment manager, with boutique adviser firms the most likely to follow this trend.

A fifth (20%) of advisers believe MiFID II will have little effect on their firms.

Additionally, almost one in four advisers (24%) reported that Brexit has prompted clients to take a greater interest in their portfolios, while almost half (47%) said clients are seeking more advice about how to protect their portfolios from post Referendum market volatility. Read more

 
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