Introduction of the retail distribution review (RDR) may not increase the usage of direct retail ETFs, according to Federation of European Independent Financial Advisers CEO Paul Stanfield, IFA Online reports. Independent financial advisers (IFAs) may not be more willing to use ETFs as they are not fully aware about how the ETFs work. Synthetic ETFs in particular are very complex.

The IFAs also face issues because they work on a commission basis but ETFs are not structured on those lines. The RDR, which will come into effect from the beginning of 2013, will ban commissions and fees will have to be negotiated upfront between advisers and their clients.

Click here for the story from IFA Online.