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RDR prompts advisers to put up hourly fees

Marc Shoffman

Clients are, on average, being charged an hourly rate of £161.80, up £15 from 2013.

The CoreData study reveals that four pricing bands have emerged: bronze, silver, gold and platinum.

Those in the bronze category typically charge £100 or less an hour, silver advisers charge £101 to £149 an hour and gold charge £151 to £200 an hour.

Platinum advisers are more expensive at £200 or more an hour.

The proportion of adviser clients in the bronze category have dropped from 23.3 per cent last year to 17.5 per cent, while silver savers have risen from 40.9 per cent to 45.4 per cent.

The portion of advisers in the gold category has seen the biggest rise in advisers in the past 12 months, from 20.3 per cent in 2013 to 27.7 per cent in 2014, while those in the platinum category have seen an increase from 11 per cent to 13 per cent.

CoreData researchers have said this shows that investors are either going for cheaper -services or would rather pay a little more for more premium services.

When split by how income is derived, the data showed that bronze advisers were more reliant on trail income, at 20 per cent, compared with 11.3 per cent for silver, 7 per cent for gold and 10.2 per cent for platinum.

Hourly fees are not the only form of payment, though, and the research showed that up-front fees account for roughly one-third of all adviser incomes across the four bands, with silver advisers the highest at 36.8 per cent.