Almost half of advisers have turned away lower value clients since the introduction of the RDR, research suggests.
A survey of 250 financial advisers carried out by NMG Consulting found that 47 per cent have turned away clients this year on the basis that the cost of their service has become disproportionately high for some clients’ needs.
Of those who had turned away clients, 40 per cent said they had turned away five or more clients in the year. The average number of clients to be turned away was 5.8.
Apfa, which commissioned the research, says it suggests thousands of customers have been priced out of professional financial advice.
Apfa director general Chris Hannant says: “Coupled with an overall reduction in the number of advisers, there is a real cause for concern over the public’s access to financial advice.
“Until the FCA addresses the issue of the cost of regulation the situation will persist; advisers will service fewer clients and fewer people in the UK will have access to advice.”
Hannant is calling for the FCA to reduce its fees to reflect the lower regulatory risk posed by the adviser profession given that advisers are better qualified as a result of the RDR.
He says: “By reducing the overall cost of advice the regulator can increase access to advice.”
Paladin Financial Services managing director Tim Purdon says: “Advisers should be chasing quality, not quantity. There is a question over whether there are enough high net worth clients to go round, and that may mean there needs to be more consolidation in the market.”