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Nine out of 10 advisers don’t want to advise mass market

Nine out of 10 advisers don’t want to advise mass market

Less than one in 10 financial advisers say they plan to launch a solution to support lower-wealth consumers during 2016, according to research conducted by Sesame Bankhall Group (SBG).

The poll, which surveyed 222 financial advisers last month, found just 8 per cent of intermediaries plan a mass market advice solution launch this year.

Nine out of 10 advisers polled by Sesame Bankhall said they believe the government should do more to highlight the benefits to consumers of seeking professional financial advice.

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A total of 54 per cent said if the barriers were addressed and an appropriate and cost-effective solution was created for lower wealth/lower income consumers, they would be interested in offering this service.

The poll came as the FCA and HM Treasury were in the midst of the gathering information from intermediaries as part of the Financial Advice Market Review.

Survey findings:

94 per cent want a a reduction in liability to reflect ‘simpler’ advice scenarios, coupled with greater regulatory clarity
87 per cent said business costs need to reduce

57 per cent believe advice costs need to be supported and funded from elsewhere, such as employers or government

56 per cent said a suite of kite-marked products needs to be developed for these consumers.

Source: Sesame Bankhall Group

John Cowan, executive chairman of Sesame Bankhall Group, said: “Advisers want to help more people, but the challenge our profession faces is how to do that in a sustainable and cost-effective way.

“In the past many advisers provided advice on a ‘loss leader’ basis, with a view to securing potential future business from their clients.

“However, various factors and the RDR particularly, have brought into sharp focus the costs of running an advisory business.

“This means firms are less likely to make concessions in order to compete for or secure new business from lower income and lower wealth consumers.”

He said the simple reality was that financial advice is geared towards those consumers who understand the benefits of financial advice, and are willing and able to pay for it.

Mr Cowan added: “Financial advisory firms can play an important role in helping to bridge the advice gap, but in order to have the confidence to implement solutions which serve the mass market, greater innovation is required.”

Jeremy Askew, managing director of Town Close Financial Planning in Loughton, said: “It all sounds sensible.

“We necessarily need our clients to be able to afford our fees. The fees are at a level that reflects the amount and complexity of work we have to get invovled in, a lot of whch is dictated by the government.

“If we could transact business with clients more cheaply we could offer advice to clients. If the government wants to have people with smaller amounts geting advice, the ball is very much in the government’s court to create the environment to make that possible.”