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Nearly a third of advised customers prefer fixed-cost model

Nearly a third of advised customers prefer fixed-cost model
 

Almost a third (28 per cent) of advised customers said they would prefer a one-off fixed cost advice model, compared to 45 per cent who prefer the ongoing holistic advice.

The survey by Boring Money, which asked 9,431 across January and April, found that there is a customer preference for more flexible advice models to suit a broad range of needs and preferences.

It revealed that one in five 5 advised customers use a do-it-yourself investment account and three in 10 would prefer a different model, paying a fixed fee for specific advice, at a moment in time or at a given life event.

Around 20 per cent of advised clients use a direct-to-consumer platform and 42 per cent said they prefer a traditional face-to-face model, over a hybrid advice model.

Those who prefer face-to-face had average total assets of £147,000 compared to average assets of £86,000 for those who prefer the lower cost hybrid advice model.

The research also shows that the preferred model for those in the advice gap – which Boring Money sizes at 13.2mn adults – is a hybrid advice model.

Boring Money chief executive officer Holly Mackay, said: “We know that customers do not fit into the neat distribution channels that large firms like to place them in.

"Life is messy and so people have multiple accounts and have differing needs depending on what life throws at them in any one year.

“Advised clients today remain broadly happy with the service they receive, although three in 10 say they would prefer to pay a fixed fee for advice as and when they needed specific help.”

Last week, FTAdviser reported that the number of investors saying they would go to an adviser if they needed help had 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.

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.

sonia.rach@ft.com

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