More data has emerged suggesting that clients want to pay significantly less for financial advice than what existing average hourly rates are.
A Gorkana Surveys poll, on behalf of Intelliflo, among 1,000 UK adults earning £40,000 or more, found that while people prefer to pay a fixed pre-agreed hourly rate, 33 per cent believe £50 per hour is a “reasonable hourly rate” for an ‘independent financial adviser’.
This is 69 per cent less than the average hourly rate advisers were charging during the first half of last year, which was £165.70 according to intermediary database MyTouchstone.
However, according to Intelliflo, 30 per cent believe a reasonable rate is between £50 and £100 per hour; 18 per cent said between £100 and £150 per hour; 9 per cent would pay between £150-£200 per hour; 4 per cent would pay up to £300; and 6 per cent would pay £300 or more for advice.
The figure doubles to 12 per cent among the 55 plus age group, who believe more than £300 is a reasonable figure for financial advice.
The latest data supports recently published research which showed that the “average wealthy investor” is only willing to pay a maximum of £110 an hour for financial advice, which Legg Mason admitted is “firmly at the lower end” of what financial advisers currently charge.
Intelliflo also found that 43 per cent said they intend to manage their pension options without seeking any professional advice.
While 35 per cent prefer a fixed pre-agreed hourly rate, 12 per cent said they favoured paying via a percentage of the total investment value and 10 per cent said they would like a combination of both options.
Despite the low pay figures being thrown around, Intelliflo found that 43 per cent of consumers wanted advice on what the options are with savings, 42 per cent want help on saving more money for retirement and 36 per cent want financial advisers to stop them from making “costly errors”.
Some 39 per cent would need to have saved £100,000 or more in their pension before they would visit a financial adviser for advice on managing it. Around one in seven would seek advice if they had less than £10,000, 11 per cent said they would need between £10,000 and £25,000 while a further 11 per cent said they would need between £25,000 and £50,000.
Nick Eatock, Intelliflo’s executive chairman, said: “Our poll highlights that financial advisers have a key role to play in protecting their clients from themselves when it comes to making decisions about how they manage their pensions.
“The publicity around the recent pension changes has highlighted that the new freedoms have the potential to be a poisoned chalice. This presents a good opportunity for advisers to reach out to pension savers to explain how they can help them make wise decisions.”