Consumers reject financial advice fees

man-walking-with-shadowMany people would refuse financial advice if they were charged for it, a survey found, just as charging is due to replace commissions in the UK adviser market.

A survey of more than 2,000 people for Deloitte, an accounting firm, found more than half of all consumers (54%) would refuse financial advice if charged a fee.

It also found that 84% of people were unaware of the Retail Distribution Review (RDR) which is scrapping commissions for financial advisers and replacing them with fees from 31 December this year.

Additionally, nearly half (47%) would be likely to reduce the number of times they use financial advisers if charged a fee of between £400-£600 (€511-€766), or 3% of invested assets.

Attitudes to paying for advice vary according to wealth and where consumers take advice. Only 3% of people with no savings would be prepared to pay a fee for advice; 14% of people with savings above £50,000 would be prepared to pay a fee.

Andrew Power, lead RDR partner at Deloitte, said: [As a result of the findings] the advice gap – the shortfall between the amount of advice required and that provided – is likely to increase as advisers leave the industry or focus on wealthier customers.”

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