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30% of UK's wealthy say advice more expensive post-RDR

by Danielle Levy on Apr 14, 2014 at 10:15

'Being more open-minded on fees may well be the way to match their offering to the mass affluent segment as well and ensure it remains profitable for their business. Many financial advice firms will be more than willing to welcome this up-and-coming group of wealthy clients.'

Needs and wants of sub-£500k

The sub-£500,000 bracket has come into focus following Barclays' decision to service this segment from call centres. The research found this segment had felt the impact of the RDR less than the wealthier segments. On the fee front, 37% of this group said they would prefer to pay fixed fees for each consultation.

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2 comments so far. Why not have your say?

Neil Shillito

Apr 14, 2014 at 10:55

Advice is not more expensive post RDR, it is more transparent. It might be perceived by 'the 30%' to be more expensive, but that is based upon their lack of knowledge previously. Also don't forget that prior to RDR many firms took the money and did very little to justify it. The quality of advice is improving all the time; it has to, why on earth would you pay a premium if there is no benefit?

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Apr 14, 2014 at 11:28

Of course it is more expensive!

How else can Advisers make up for the disappearance of up-front commission?

In the past, asset-based fees were a component of total remuneration for IFAs - now it is the primary source.

It's still a bonkers way of paying Advisers as for the majority, their engagement is service-based and hence lends itself to hourly rates rather than ad valorem fees.

But, hey ho, that's what most IFAs want - to see income rise with markets (potentially) highly uncorrelated to the intensity of client service.

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