According to the FCA Asset Management Study published June 2017, the pre RDR trail paid out by old funds is an astonishing £1.4bn annually.

This is the income of IFAs.

With a few exceptions it is paid out only to authorised firms.

Since there are 12,000 firms including AR firms, it is easy to calcuate that it amounts to £117k per firm.

Since there are just 20,000 IFAs, that amounts to £70k per IFA.

What will they do after the sun-sets on this payday?

Well, I can say just one thing.

It is the IFA who holds the customer relationship, and it is the IFA who holds all the cards and all the trumps in the great game, not the fund manager.

IFAs are like the fast bowlers of the cricket world. All the legislation and changes work to try and help defeat them. Nearly all the regulation since 1988 going against the IFA, rather than against the wholesale industry, and yet, like the fast bowler, they are the ones who win the mandates, win the game.

IFAC welcome the chance to beat the DFMs down on price, increasing customer returns and depressing the total spread that currently averages an appalling 2.5 per cent.

It is also notable that asset managers who are being criticised for hiding profits from IFAs via the hitherto unknown procedure of syphoning secret "box profits" into their own pockets are now calling for this pre-RDR trail to be stopped by the regulators – oh the irony is delicious!

More IFAC comment to follow in the weeks to come. About us