CompaniesApr 24 2012

Survey finds 90% of IFA clients content with fees move

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Financial advisers have reported that clients have overwhelmingly responded either neutrally or positively to discussions about transitioning to adviser charging and fees, research by Cofunds has revealed.

The platform asked 614 financial advisers whether, when discussing the transition to a fee model with their clients, they had in the main responded neutrally, positively or negatively.

Around 57 per cent said their clients had reacted neutrally and 33 per cent said they reacted positively to the discussion. Just under 10 per cent said the reaction had been negative.

The positive picture in the Cofunds reports contrasts sharply with that presented in an Ernst & Young study, published earlier this month, which found that around 45 per cent of UK life and pension customers are not prepared for advice.

The report, based on research with 1,000 life and pension customers, found an additional 19 per cent said they wanted to pay for advice through charges deducted from the policy, while 12 per cent through either an up-front or ongoing fee.

The news follows a report from IFA database MyTouchstone last week which revealed that advisers that already have an existing fees model or that have moved over to charging hourly fees earned on average £148.46 per hour in Q4 2011.

The figures, which are based on analysis of the 4,600 advisers in the database, stand in direct contradiction to a YouGov survey conducted earlier this year, the results of which indicated that only 1 per cent of consumers would pay more than £100 per hour for professional financial advice.

Alastair Conway, sales and marketing director at Cofunds, said of its report: “This is encouraging as it goes to show that those members of the public who already seek qualified financial advice can appreciate the value their adviser’s professionalism and expertise add.”

Adam Walton, executive director at Ernst & Young, said of its own research: “The wider survey shows that the expectation of consumers and the industry are often misaligned, but the consumer’s current resistance to paying for advice is marked.

“There is no way of knowing how customers will actually react to the post-RDR world. We definitely don’t think this is the end of paid-for advice but there is a massive educational piece to be done to help customers navigate the new landscape.”

Additional reporting by Ashley Wassall