There is a huge mismatch between the amount advisers are planning to charge in the retail distribution review (RDR) world and how much clients are willing to pay, according to fund group Allianz Global Investors.
A survey by the provider found that 86% of advisers planned to charge between £100 and £200 an hour for advice, but that only 7% of clients surveyed would be willing to pay this much.
One in four clients would be prepared to pay up to £50 per hour for advice, but only 7% of adviser would be prepared to work for this rate.
Allianz GI surveyed 200 adults aged between 50 and 70 year old and 166 financial advisers.
A further 21% of consumers would be willing to pay between £50 and £100 an hour but again just 7% of advisers would be willing to work for this rate.
The survey also found that 32% of consumers surveyed would not be prepared to pay for advice at all.
Nick Smith (pictured), Allianz GI head of retail sales, said the survey results were concerning.
‘In the run up to the RDR there was a lot of speculation about an ‘advice gap’ - in other words, a discrepancy between what investors are willing to pay for advice, and what advisers are willing to work for. As the dust starts to settle, our research points to a really significant mismatch in expectations.’