RDR will not hit "top-end" IFAs

The head of Avalon – one of the first platforms to launch in the UK – says the RDR will have very little impact on the high-end of the market.

Avalon, which launched 10 years ago, caters for advisers with high net worth clients and director Harry Kerr says this segment of the market should be virtually untouched by regulatory changes.

"The FSA wants advisers to have robust investment processes but the top-end IFAs already have this," he says.

Remuneration models for the high-end market, in particular, will be unaltered by new regulations, according to Kerr.

"For IFAs who have always been clear on charges and have robust investment processes I don't see what the RDR will change."

"IFAs at the higher end of the market do not use onshore bonds for savings - they tend to use portfolios of unit trusts and ISAs in order to use a client's capital gains allowance. Here, there is much more clarity and transparency on charges.

"So companies which have always had unbundled structures do not have to do anything to their systems. If you run your affairs properly, the RDR should not really change much."

Avalon has been profitable for four of the last five years and Kerr attributes this to a high standard of customer service.

"I like to know the IFAs I deal with and have a relationship with them similar to the one they have with clients," he says.

He says the platform, which has a core of around 50 key users, is the only completely independent small niche player in the market.

Looking back on the market over the last ten years, he says advisers are now more professional and have a far better knowledge of investments.

Going forward, the Avalon director predicts "headline fights" between platforms battling over who offers the cheapest proposition.

In contrast to Nucleus chief executive David Ferguson, who says 2010 will be a year when the dividing lines between platform models become clearer, Kerr thinks distinctions will blur as they evolve into similar entities. He also expects more foreign players to enter the UK platform space.