Only one client in 1,000 is prepared to pay a fee for financial advice, according to research carried out by the European Federation of Financial Advisers and Financial Intermediaries, the European equivalent of Aifa The EU-wide research found that just 39 per cent of clients surveyed would insist on full disclosure of the commission received by their adviser. The remaining sixty-one per cent are not concerned about what the intermediary is getting.
Federation secretary general Vincent Derudder says it is discouraging that less than half of consumers are interested in knowing the exact amount that an intermediary is making from commission.
He points to the discrepancy between the 39 per cent of clients who would like full disclosure and the 0.1 per cent that are prepared to pay for advice.
Derudder says there are few financial planners in the EU who make their income from fees, putting the figure at less than 1,000. He says a big majority of advisers make their income from commission.
Around 500 people were interviewed for the research, which is an ongoing project for the federation.
Derudder says: “The outcome of the research has been very discouraging – only one client out of 1,000 is prepared to pay fees and, far from wanting full disclosure, less than 40 per cent of those clients surveyed said they would insist on full disclosure of an adviser's commission.
“The other 60 per cent were not concerned about what the intermediary is making. It will take years before the average client considers an IFA to be a real adviser like an accountant or a lawyer.”