Almost half of financial advisers think Mifid II will hurt the industry, but a similar proportion aren't sure what it will mean for them

 
Hayley Kirton
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Financial advisers are also concerned the new red tape could cause a shift way from independent to restricted advice (Source: Getty)

Almost half of financial advisers are worried a tougher set of rules for the sector, which are due to come into force in less than a year, will hurt their industry, but a similar proportion also still don't know what it will mean for their own business.

Financial firms will have to comply with the updated version of the Markets in Financial Instruments Directive (Mifid II) from January 2018. However, 45 per cent of the advisers surveyed by CoreData Research believed the new red tape would have a negative impact on their sector.

Just less than two in five (38 per cent) thought Mifid II's impact on the industry would be neutral and 17 per cent felt the incoming bundle of regulations could have a positive impact.

Read more: European Commission mulls delaying Mifid II for a year

Despite this, 43 per cent also said they were unsure how Mifid II would impact them and their business personally.

"This hints at a certain level of unpreparedness on behalf of some advisers and, with the implementation clock ticking, those advisers not up to speed should get their skates on," said Craig Phillips, head of International, CoreData Research.

Around half (52 per cent) of those quizzed thought Mifid II would cause more people to shift away from being independent advisers, who can recommend a wide-range of products, to restricted advisers, who make suggestions from a more limited pool of products.

Read more: How to protect your portfolio from inflation's rising tide

Almost two-thirds (63 per cent) believe the regulation will also cause a decrease in the use of some of the more complex financial products on offer today.

As for concerns on what needs to be done to become Mifid II compliant, 86 per cent said they were worried about chasing clients for up-to-date information to meet the new requirements, while 82 per cent stated they were fretting the price tag which would come with the additional administrative burden.

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