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Research reveals what consumers expect to pay for advice

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Many clients currently believe there is no cost for financial advice and would only be prepared to pay £155 for a comprehensive financial review, according to research from CoreData.

The research and consultancy firm polled 1,020 consumers to gauge their appetite towards paying fees for advice and how much they would be prepared to pay.

Of those polled, 44 per cent have never used a financial adviser. A further 29 per cent have used an adviser in the past but do not currently receive advice, while 27 per cent use advisers on a regular or occasional basis.

Out of the clients who see a financial adviser, four in ten do not believe there is a cost for the advice they receive.

The research shows that half of consumers polled who are not currently receiving financial advice on a regular basis would consider using an adviser, but would only be prepared to pay an average of £155 for a financial review.

A further 10 per cent of those who would consider taking financial advice would not be prepared to pay anything at all.

If charged on an hourly basis, consumers would be prepared to pay an average of £39 an hour for advice.

CoreData head of UK and Europe Craig Phillips says: “A key challenge for advisers is in gently articulating the cost of delivering a full financial plan. Clients need to appreciate advice is much more than just the face-to-face time with an adviser.”

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Readers' comments (28)

  • The report doesn't differentiate between independent financial advisers and bank advisers.

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  • Blimey...£39 an hour..I fill my car with that in about 30 seconds..

    There does seem to be a disconnect between what advisers think they are worth and what the consumers believe is satisfactory, and no exams or letters after the name are going to put that little problem right.

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  • Somebody ought to tell the regulator about this. Who is going to pay their fees and salaries if half the advisers can't make a living ? Have they got a Plan B, do you think ? Perhaps a quarterly levy will be required.

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  • Perhaps the FSA should have done this survey before they started the RDR. Maybe they would understand that the public is not prepared to pay upfront fees for advice.
    So much for we have been listening to the public and " This is what the public want"

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  • .. at that hourly rate, I wouyld need to work for about 2 months solid just to pay the firms' PII premium and FSA/FSCS reg fees!!

    As stated above - something's not adding up

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  • Brilliant £155 and the FSA think the RDR is a good idea.

    The industry is hovering over a precipice and reports like this only show how out of touch the FSA are.

    11 mths 13 days to doomsday

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  • This is precisely what you would expect from a public that has no understanding of the costs of services (not just financial services).

    It is impossible to educate everybody on the costs of every service they receive, no matter whether that is from an IFA, a plumber computer technician or a nurse. In our sector what should be important is the value to them, not what an IFA gets paid. If they want a two bob service they will probably get poor advice. If they are willing to pay a proper amount to an adviser you would expect them to do well over the longer term.

    If you want to put people off looking after their finances you continue to hilight what an adviser may earn from a particular investment, for example, and the media will always select the most profitable ones, won't they. Negative advertising from the media and the regulators are doing the public down.

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  • mmmmm?

    We have been fee based for 2 years and our clients seem happy to pay fees. Most of our fees are fixed price, but reports etc get charged internally at £150 per hour. What clients think "advice" is free-advisers (the industry?) needs to explain the effect of commission and compare it with reasonable and moderate fees. Above all, advisers need to deliver a service clients want and NEED and here is the problem. Most people don't need us! We still have the option of commission for life and mortgages so just structure your model to yield a profit.

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  • How many people buy a product, not a financial product, because they see the word ‘free’? Yet those in the know, know that it’s not free, just built into the price already. And so it has been with financial advice but it wasn’t advertised as free because it wasn’t, yet that is the perception.

    So yes there is big hill to climb, but in time client’s will learn that the price is worth paying, but only after they realise the options are poor quality and value, and a little more mis-selling?

    £39 per hour or £155 all in? I better cancel the order for the new BMW and buy a Hyundai instead!!

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  • We're done for if that's what people think advice is worth. Isn't this the sort of survey that should have been done before RDR was brought in?

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