Over half of consumers won't pay for advice
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Over half of consumers may not be prepared to pay for financial advice, according to research from the Association of British Insurers.
The ABI research asked over 2,500 people about their attitudes to financial advice.
It found a third of respondents thought full financial advice would cost up to £300, while the ABI puts the cost of a full financial advice service at an average of £670.
The trade body says the research demonstrates the need for a simplified advice model.
ABI acting director of life and savings Helen White (pictured) says: “The results of our research send us a strong message about what consumers need to fill the gap between paying for full financial advice and having none.
“For the RDR reforms to deliver good outcomes for consumers and the industry we need to both convince sceptical consumers that full advice is worth paying for and also come up with a model of simplified advice for those consumers who cannot afford or do not need full financial advice.”
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Readers' comments (21)
Norm d'Plume | 13 Apr 2011 3:42 pm
Simplified advice is a disaster waiting to happen. As soon as something goes wrong (which it will) customers will look for someone to blame.
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Evan Owen | 13 Apr 2011 4:03 pm
How can advice be 'simplified'?
It defies all logic, sums up the ABI...
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Anonymous | 13 Apr 2011 4:11 pm
.....but half will??
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Anonymous | 13 Apr 2011 4:22 pm
Simplified Advice blah blah blah. Simplified Products blah blah. CAT standard blah blah. Stakeholder blah blah.
Nobody to sell them, nobody will buy them. Savings gap increases. Waste of time and money. Well... someone is making money out of the magic roundabout.
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John Blackmore | 13 Apr 2011 4:34 pm
Just imagine what will happen post RDR with less "advisers" charging more and more in order to pay for the increased costs of regulation. Well done FSA
A minority of highly qualified ( not Level 4) expensive advisers dealing in complex advice will thrive the rest......
The public will basically have to chose between the banks and dealing direct. advice will not be an option.
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Dominic Thomas | 13 Apr 2011 4:34 pm
Context is everything, without knowing how and what respondents were asked, this information is inconclusive. As with most aspects of financial services, most people want to ignore the painful truth that at some point someone has to start paying.
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Anonymous | 13 Apr 2011 4:40 pm
The trade body says the research demonstrates the need for a simplified advice model.
No it demonstrates just what a devastating effect the RDR will have. Still who cares, certainly not the FSA!
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DH | 13 Apr 2011 4:44 pm
Will some-one please open thier eyes and sort out the whole ***!@? mess.
DC time to step up to the plate
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snooks | 13 Apr 2011 6:16 pm
What, you may ask does the ABI know about giving advice? They produce savings and investment products which are of little value as we can replicate them ourselves on Platforms. They DO provide protection products and in 30 years I haven't seen a circumstance in which a buyer is able to successfully get the right Life, CI or PHI or for themselves without help on choosing cover level, how the policy should be written and who teh best provider is in terms of cost and wordings. This advice can't be simplified or made subject to some sort of expert system which can be operated either by teh buyer themselves or an inexpert intermediary. It doesn't work. The Regulator can't expect to have successful outcomes from anything other than a process which takes account of all of the client's circumstances and needs and of the suitability of the available cover. It's as simple as that-in other words it’s not simple at all. Compare it with any other field in which advice is required for a successful outcome for a consumer of services. Would you be happy presenting your medical problems to an adviser who only has a low level of expertise and a limited range of solutions? It may be that the FSA have to measure the effect of their compliance regime on the availaibility in the UK of sound independent financial advice. Simplified advice might mean simply trusting IFAs to look after people well and to provide a caring service. The regime the FSA has steadily created leaves IFAs having to document absolutely everything we do to a much greater extent than say doctors or lawyers do-it is that weight of proving to an inspector that we have done absolutely everything we should have done according to their book in the right order and recorded in the right manner that is the problem--you can't solve that unless we are trusted to get on quickly with jobs instead of having to compile auditable files for each and every bit of work we do--simple or not. I would be able to give an awful lot more advice if I didn't need a vast file for every bit of it and the quality would be fine.
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Anonymous | 13 Apr 2011 6:19 pm
nobody is surprised by this apart from the FSA who are in denial.....I can almost envisage the public lining up at my door to get advice because they pay by fee which eliminates product bias. It's a complete sham and the only winner here will be the great minds at the FSA who have simply justified their jobs! It is impossible to simplfy advice....people either have advice or they don't. My guess is that at least 50% will choose to 'transact' online rather than take advice they have to pay for. The good news is that the FSA fines should tumble because there will be very few advisers left to fine and I can't see people complaining to the FSA because they gave themselves incorrect advice online! Like Anonymous said earlier 'nobody to sell, nobody will buy....savinds gap increases...great outcome!
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