Investor appetite for adviser help diminishing

Investor appetite for adviser help diminishing
Credit: FT Money

The number of investors saying they would go to an adviser if they needed help has started to drop, with research showing a fall of 6 percentage points over the past year.

Some 45 per cent of investors would talk to an adviser today, down from 51 per cent a year ago according to Boring Money’s 2022 Advice Report published this morning (May 11).

The advice gap is also widening, with 500,000 more adults and £113bn of assets falling into it in the past year, taking it to 13.2mn adults and £840bn assets in total.

This means fewer than one in four of all UK investors receive financial advice today. 

Of those who do not receive advice, the report found what it called “a clear preference” towards digital advice.

Nearly half (47 per cent) expressed a digital preference, while a quarter (26 per cent) said they would prefer robo over face-to-face advice.

It also found that those in the advice gap prefer coaching (38 per cent) and one-off advice (30 per cent), versus face-to-face advice (15 per cent).

For those who have received advice in the past 12 months, the majority (89 per cent) said they were satisfied with their current models.

And only one in 10 of those are actively considering downgrading to digital advice or do-it-yourself services to reduce costs.

Though the report pointed to the “threat” of digital advice for advisers as awareness grows. With cost the biggest driver, it found 37 per cent of advised clients indicate a preference for digital over face-to face.

“The main opportunity is to attract new customers, rather than to poach current customers from more traditional advice models,” said Boring Money’s chief executive, Holly Mackay.

“However, although satisfaction with advice remains high, once lower-cost digital or hybrid models are explained, nearly four in 10 people would be interested in learning more. 

“We also see substantial interest in fixed price one-off advice packages as people question the lack of flexibility in current models.”

The report also drew data from Boring Money’s website, which helps individuals find an adviser. Its gender filter pointed to an appetite for female advisers, with 70 per cent searching for women over men.

As for fee structure, 86 per cent of searches chose a fixed fee option.

Boring Money’s report drew on two data sets, including 6,305 UK adults in January 2022, and 3,126 UK adults in April 2022. It also surveyed 71 advisers.