IFAs face tougher trading conditions because the majority of clients will "shop around" for the lowest possible adviser charges in a post RDR (Retail Distribution Review) world says new research  out this week from NMG.

According to the report;

- 67% of investors who have previously used an IFA will compare charges before choosing their adviser.

- 69% agree that the new adviser charge will improve understanding of the cost of advice

- 27% however said they might still purchase their investments without seeking guidance.

NMG director Jonathan Gunby says, “Our investor research is broadly encouraging, with good levels of support from clients for the adviser charge. Overall we don’t expect many investors will be driven to change their current arrangements.”

“However, there are clearly some concerns and advisers must not take their existing relationship for granted. The industry needs to better understand and prepare for the segment of clients that they think they can go it alone rather than pay a charge for advise.”

NMG concluded that the advisory charges, in addition to the higher levels of qualification that will be required, are likely to see more people use an adviser in the long-term.

The use of IFA’s is however already increasing healthily in the mortgaging market. According to advice portal unbiased.co.uk the number of consumers seeking mortgages advice grew by over a quarter during the first six months of 2010.

Karen Barrett, chief executive at unbiased said “over the last six to twelve months there has been more and more good news about the mortgaging market. We have seen providers re-enter the higher loan to value market, more competitive deals to new and existing borrowers are re-appearing and new providers are entering the market.”