Of those surveyed who don’t currently have an adviser but who said they would consider enlisting the services of one, the average fee they said they would accept as reasonable for conducting “a thorough financial review” was “a mere £155”, the CoreData Research report reveals.
“This low figure excludes the fact, though, that approximately a fifth of those who would consider enlisting the services of an adviser would pay nothing at all for advice,” it adds.
Four hours, meanwhile, was found to be the amount of time the average UK consumer believed would be sufficient for a thorough review of their financial situation.
Britain’s financial services industry, the report’s authors conclude, “faces the task of bridging the gap between what people expect to pay for advice and what an adviser would have to charge to make it financially feasible to converse with such clients”.
The 77-page CoreData report, Consumer Fee Threshold and Appetite, was based on the online responses of a nationally representative same of some 1,020 UK consumers, and was meant to gauge consumer willingness to pay for advice ahead of the 1 Jan 2013 date by which all UK financial advisers will be required to move to a fee-based remuneration system.
At present, the research reveals, almost four in ten of those households that currently have a full-time adviser on the scene – which the report estimates at around 2.1 million UK households – “believe there is no cost for the financial advice they receive”.
This, the report points out, equates to 1.17 million of UK households having a full time adviser and saying that they pay for advice given, or “approximately only 4.4% of households”.
Other findings:
- Around 5.1 million British households currently engage with financial advisers on a sporadic basis (that is, they make use of them from time-to-time).
- 72.4% of people “have never or no longer use an adviser”. Of this 72.4%, 41.9% say they are “highly unlikely to ever” engage one.
- The area most would expect covered as part of a full financial review is investment & saving (38.1%), followed by personal retirement planning (27.2%) and advice relating to ISAs and/or unit trusts (26.8%).
- Least in demand, from an advice point of view, were said to be stock-broking services (9.7%) and expatriate advice (4.6%).
More information about the research may be found at www.coredataresearch.co.uk.
