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&#39Move to fees may scare off low earners&#39

Intelligent Finance warns that any moves towards feebased advice could backfire and deter people on low incomes from seeking financial advice.

Research commissioned by IF shows that nearly 60 per cent of respondents would be more likely to seek advice under a commission-based system than if they had to pay for advice.

Within lower-income groups, the research shows people are more than twice as likely to seek advice if the adviser was paid by commission rather than an up front fee. Nearly 70 per cent said they would go to a financial adviser if they were buying a new house, moving house or remortgaging.

But the research suggests that, although many people believe the advice from a fee-based adviser would be beneficial, they might be reluctant to pay the up front fee.

The average fee people felt would be appropriate for mortgage advice was £128. Only 4 per cent felt a fee of more than £350 would be appropriate.

IF says its sees room for improvement in the present system such as making commission more transparent.

The company would like to see IFAs declare their commission as a way of building consumer confidence.

Director of sales Ian Jeffery says: “This research confirms our view that commissionedbased advice where transparently and appropriately applied provides benefits for consumer and provider alike.

“A move to a fee-based advice system may shut the door to advice on many of the least well-off.”


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