View the article online at http://citywire.co.uk/wealth-manager/article/a745977
30% of UK's wealthy say advice more expensive post-RDR
by Danielle Levy on Apr 14, 2014 at 10:15
Over 30% of wealthy clients say advice has become more expensive since the onset of the retail distribution review (RDR).
The findings form part of a study commissioned by Pershing, which also found that 22% of a 1,000-strong sample of wealthy individuals are considering changing their adviser or wealth manager.
This is a trend that proved most prominent amongst those who were aged 45 and under, where 34% said they were thinking about a shift.
On a positive note, respondents largely understood the benefits of RDR, with the vast majority taking the view that the outcomes had the potential to improve interactions with financial services. Likewise they felt fees for products and services were easier to understand and compare.
Wealth managers and advisers may also be relieved that 75% of the UK’s wealthy believe they are receiving good value for money from their providers. Moreover, 77% said they had an understanding of how their financial provider is remunerated.
When it comes to fees, less than one fifth of the sample preferred ad valorem fees, with fixed fees for each consultation proving the most popular option for 30% of respondents.
The second choice was a transaction or project fee dependent on the task.
The power of self-directed investing shows little sign of abating with 49% of the sample identifying themselves in this category. It could be deemed this figure shows how under-penetrated the mass-affluent and high net worth markets are.
Scorpio Partnership, which conducted the research on behalf of Pershing, concluded the finding suggests a 'huge opportunity' for wealth management firms that can meet this group's 'minimal advice needs'.
'There is an opportunity for wealth managers to engage self-directed investors with a high-value, digitally-enabled service,' Pershing chief executive Kevin Bonar.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.