Only 13 per cent of consumers are interested in seeking out ongoing fee-based advice, research from JP Morgan Asset Management reveals.
A report from JP Morgan, published today, looks at the appetite among UK consumers for fee-based advice, and the different advice services likely to appeal to consumers seeking advice.
JP Morgan based its findings on a survey of 2,028 individuals with a gross household income of over £50,000, having previously established that a gross household income of £55,000 is the tipping point where consumers become significantly more interested in taking advice. The company also carried out one-to-one interviews with adviser firms that have established successful fee-based models.
It found that 13 per cent of respondents were likely to seek out an ongoing fee-based service, but found 40 per cent were prepared to pay for task-based advice services.
More than 80 per cent of those surveyed said they would seek professional advice to some degree, while only 19 per cent wanted to transact on a purely non-advised basis.
Some 75 per cent of respondents had used an adviser in the past. JP Morgan found that interest in using a professional adviser peaks among individuals with a household income of £150,000 to £250,000.
Retirement planning was identified as a key driver for advice for 75 per cent of those surveyed. 25 per cent said they were confident enough to research and set up a pension plan for themselves.
The research found that clients would be most willing to pay a fee to an adviser who is proactive in managing ongoing portfolio adjustments, and provides regular reports and early warnings of market volatility and financial events.
Clients stated they preferred to contact their adviser through email, with face-to-face meetings as a secondary preference.
JP Morgan Asset Management head of UK funds Jasper Berens (pictured) says: “Our research reveals the most sought-after client segment, those expressly seeking to pay for ongoing advice, is relatively small. Firms seeking to service this segment really need to be on the ball in terms of the service and features they offer.
“However there is also a large proportion of mass affluent and high-net worth households seeking less conventional approaches to getting advice such as task-based and guided support. Firms that can think more creatively about how they can advise and service those looking for advice may discover a large and interested market out there.”