Despite fears that consumers would be unwilling to pay for financial advice post-RDR, AXA’s latest Big Money Index has found that one in four consumers are willing to pay for financial advice, the same number as pre-RDR.
Amid continuing economic volatility and persisting uncertainty about where to invest, consumers not only appear to be seeking professional financial advice to manage their finances, but they are as happy to pay for it as they were pre-RDR.
While the wealthier segments remain the most likely to turn to professional financial advisers (46 per cent of exclusive lifestyles and 38 per cent of successful security), it is good to see that 25 per cent of young professionals are happy to pay for advice to assist with money management.
David Thompson, managing director of Elevate, AXA Wealth, said: “AXA’s latest Big Money Index would suggest that pre-RDR concerns that consumers would be less willing to pay for financial advice as it became more ‘transparent’ seem to have been unfounded. The number has remained consistent over the past 12 months, suggesting the RDR has not damaged the industry as some commentators may have feared.
“A core aim of the RDR was to establish financial advice as a profession akin to solicitors or accountants, and while it is still relatively early days and the longer-term impact of the RDR is yet to be fully realised, this research is a reassuring early indicator. As economic uncertainty and financial pessimism continue, consumers are willing to pay for professional financial advice to help make the most of the money they have. It will be interesting to see how this trend develops, as the effects of the RDR begin to bed in over time.
“By facilitating a range of adviser charging options Elevate is able to offer advisers and their clients flexibility around how financial advice is paid for, whether this is by one-off payments, on an ongoing basis, ad-hoc payments when advice is given or a combination of the above.”
AXA’s Big Money Index follows research earlier in the year by AXA Wealth, which found that one in five consumers that have never sought financial advice in the past intend to do so in the future to ensure they have sufficient income for their retirement. The research suggests an opportunity for financial advisers to demonstrate the value they can bring to a new group of consumers.
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