Research from Holly Mackay’s consumer website Boring Money has found while 28 per cent of adults prefer the concept of face-to-face advice, just 8 per cent are prepared to pay more than £100 an hour for it.
The ‘Spring Census’ report brings together data from financial firms and third-party consumer businesses with a YouGov survey of 2,042 UK adults conducted in March.
The main finding was an appetite to pay for financial advice is not related to relative affordability.
A third of households with £100,000 to £150,000 of savings and investments said they would pay up to just £50 an hour for advice – the same percentage said they would not be prepared to pay anything – while just 7 per cent of people in this wealth bracket were prepared to pay more than £100 per hour.
Boring Money stated 25.45 million UK adults have a savings or investment product, yet just 4.1 million adults reported an ongoing relationship with an adviser, leading to the ‘advice gap’ identified by the government and regulator in the Financial Advice Market Review.
That final report identified more automation of advice processes - now widely referred to as ‘robo-advice’ - as a possible solution to the drop off in people using financial advisers since the Retail Distribution Review pushed many towards higher net worth clients.
However, Ms Mackay stated robo advice, “so often trumpeted as the solution for millennials”, is actually far more likely to displace “the red braces wealth management brigade” and find its way into affluent, older households.
The research showed 40 per cent of Britain’s wealthiest households like the idea, compared to a national average of just 18 per cent.
The concept is also more appealing to 35 to 44-year-olds, compared with the 25 to 34-year-olds many assume are the target market for such digital alternatives.
“Once robo-advice becomes a) really robo instead of today’s smoke and mirrors concealing what are mostly tech-light businesses, and b) actually provides some sort of advice, then digital advancements will be the only way to help the 21 million adults in the UK with savings and/or investments who do not have a financial adviser”.
Carl Lamb, managing director at Almary Green, said: “I suspect there is a lot of truth in this and it would not surprise me if ultimately 80 per cent of the population are covered by robo advice.”
Last year website Money.co.uk commissioned One Poll to survey 669 over-55 year olds with a pension and found that just one fifth would be willing to pay for it, dropping to just 13 per cent of men.
On average, those planning to make a withdrawal from their pension pots would be willing to pay just £253 for advice, Money.co.uk’s survey revealed.