Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

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

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

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. 

'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.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play French fund CEOs: 'Brexit is a lose-lose situation for all of us'

French fund CEOs: 'Brexit is a lose-lose situation for all of us'

'We'll all lose out - but London is an international city, Paris is not.' Leading French asset management CEOs tell us what they think Brexit will mean for the investment business.

Play Henderson Eurotrust's Stevenson: dealing with European cynicism

Henderson Eurotrust's Stevenson: dealing with European cynicism

Tim Stevenson talks about where he finds his opportunities in the current environment in Europe

Play Mark Barnett - part 2: why I'm not buying Lloyds

Mark Barnett - part 2: why I'm not buying Lloyds

In the second part of our exclusive video interview, Barnett explains why he has no intention of buying Lloyds, and where he sees the greatest income opportunities.

Read More
Wealth Manager on Twitter