“Although the value of advice can be enormous, sometimes it is difficult for consumers to look past costs, especially on difficult cases that require a lot of work.”
He continues: “A consumer needs to feel the adviser does not just sound like they know what they are talking about, but that they have the qualifications to prove it.”
“They will look for someone who they trust or feel they can build trust with, with the knowledge and expertise that can help them achieve their objective.”
He adds: “The changes the RDR has introduced has broadly improved advisers' ability to satisfy these requirements.”
Changing the perception of advisers
After a period of pain in the immediate aftermath of the introduction of the RDR, the advice industry has come out stronger, and will continue to grow from strength to strength, suggests Verona Kenny, head of intermediary at Seven Investment Management.
She also suggests this has already had a positive impact on improving the public’s perception of advisers.
“One of the key goals of the RDR was to ensure there was more transparency in the industry and with the introduction of adviser charging in place of bundled charging and commission, clients now have a much clearer understanding of what they are paying their adviser and therefore the value they are delivering,” she explains.
“The industry is more transparent and is better qualified than perhaps ever before making it easier for advisers to justify the fees they charge.”
She adds: “There is, of course, more work to be done but there has been huge progress and this is encouraging to see.”
Similarly, Mr Connell explains that because the RDR has made the process more transparent and facilitated more detailed conversations about how advisers are being paid, it has reassured clients they are doing business with a professional firm.
He adds: “And, for those consumers who are doing business with advisers, has contributed to an improved perception of advisers.”
However, according to Mr Cowley, charging post-RDR initially did not improve consumers’ perception of advisers, as it shed light on the 'commission' they were paying.
He explains: “With this cost transparency, some consumers had little understanding of why they were being charged ongoing commissions which caused friction between them and their advisers.
“However, consumers are now starting to understand the reasons behind the costs and the trust has gradually been re-built over the past ten years, and will hopefully improve even further in the future.”