Financial advisers may want to consider lowering their fees to attract more clients after a recent survey found millions of people in the UK would be willing to pay for advice if it cost less.
A representative survey of 2,088 adults by online financial advice service OpenMoney found that 17% would part with some cash if advice was less expensive – equating to around six million people/potential clients.
Alex Shaw, director of Progeny Wealth, told International Adviser: “My experience is that clients don’t moan about fees. Clients are interested in fees and the value that is being provided.
“If a client doesn’t feel they are getting value for money, they are well within their rights to look around for another adviser or to take a DIY approach.”
Fee-based rejection
OpenMoney’s findings are part of a reporting looking at the UK’s wealth, debt and the need for advice: The UK Advice Gap: Are Consumer Needs for Advice And Guidance Being Met?
Its survey found over 70% said they were not likely to pay for financial advice.
Of those, 35% said they would never pay for financial advice and 17% would pay for advice if it cost less.
The survey also found that only 22% would use paid services to help make an investment and 16% would use a fee-based adviser to arrange a pension.
“Discussions about fees should definitely happen with every client,” said Shaw. “Ultimately, with any service, it is a simple decision for the client. What am I paying versus what am I getting?
“Therefore, it makes absolute sense for advisers to have regular discussions with clients about costs.”
Firm choices
The FCA recently said it will look at the advice gap in its call for input on the evaluation of the Retail Distribution Review and the Financial Advice Market Review.
It is asking how consumers access advice and guidance and what barriers there are to making services more affordable.
Shaw was asked whether there should be a standardised cost method.
“No. Different firms offer different services and should be able to price those services accordingly,” he said.
“Increased competition should mean that a wider range of services and pricing structures become available.”
