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RDR has little impact on public trust of advisers

Business-General-Handshake-Hire-Appointment-700x450.jpgConfidence in the advice sector since the introduction of the Retail Distribution Review has remained static among unadvised clients, new figures from the Personal Finance Society show.

The PFS surveyed 2,030 people in March to gauge if they had confidence and trust in the professional financial advice sector. It compared its results to a similar survey conducted in 2013.

The survey filtered out 859 respondents who knew they could not afford advice, don’t make investment decisions, or do not have funds to invest. 

This left 1,171 respondents and of this group 445 were advised and 726 were unadvised.

Of the unadvised respondents, 18 per cent said said they had confidence in the advice sector – the same proportion as 2013.

However, confidence among customers who do use an adviser has increased from 43 per cent in 2013 to 60 per cent in 2016.

Advised women accounted for the biggest positive shift in confidence with an 18 percentage point increase compared to 13 percentage points for advised men.

Across both advised and non-advised people those who said they trusted financial advisers rose from 32 per cent to 34 per cent.

The PFS plans to conduct a similar survey later this year to track progress.

PFS chief executive Keith Richards says: “As a profession we are proud of the work we have done to restore public trust and confidence to engage, and while I acknowledge there is work to be done, professional advice is increasingly being recognised for the vital role it plays in retirement planning in the wake of recent pension freedom changes.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Who is surprised? The RDR was a half baked cack handed attempt to sort things out. Even the Regulator is still product obsessed. What I had understood is that we were all now supposed to provide (and charge for) advice – whether or not a product resulted. Fee charging should have been universal with no exceptions and execution only should have been completely outlawed.

    Instead, if required, people should have been able (if they wished) to purchase all financial products themselves – without an intermediary). In that way, no execution only and no comeback if the purchaser cocked up. (For those who don’t know there are numerous financial products that providers won’t deal with the public.)

  2. PS But as always this research is flawed. When will it ever sink in that many of us don’t consider our clients as the ‘public’. Many of us exist exclusively on recommendations and referrals. (That of itself must say something – particularly if coming from professional connections). The idea of someone coming ‘off the street’ is not something that fills many of us with great enthusiasm.

    If you actually take a pollm of those who have used an adviser you may well find you get completely different results.

    It is a convenient ‘get out’ for those that don’t use, and probably have no intention of using, a professional adviser, that they ‘don’t trust them’. These people are generally not engaged with financial matters and often don’t even have the wherewithal to make them an economic prospect. After all it is official policy to get people to spend and this is reflected in the UK having the lowest savings rate in the developed world. Thanks to our current Chancellor this is now being accelerated by such measures as ‘pension freedom’.

    No wonder we need lots of immigrants. Most people when the finish work will in future be relying on benefits.

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