With the RDR deadline now passed, Andy Zanelli, head of retirement planning, AXA Wealth, considers whether or not consumers understand the real value of professional financial advice:
After six years of preparation, financial advisers now have to adhere to the regulation introduced under the Retail Distribution Review. Marking the biggest change in the financial services industry in decades, the last six years has seen advisers, providers and governing bodies make moves to position financial advisers alongside other professionals, like solicitors or accountants.
However, recent research from AXA Wealth calls into question how successful the industry has been. More than a third (36%) of consumers question the value of paying for financial advice because they don’t believe it will make enough of a difference. In contrast, almost nine in ten (87%) consumers see the value of paying solicitors’ fees. Not wanting to pay for something that isn’t tangible and a lack of trust in financial advisers were cited as the most popular reasons for not paying for financial advice.
Now more than ever advisers need to demonstrate how they add value to the process and just why there is no substitute for professional financial advice, especially in these turbulent times.
Our research raises interesting questions around the value judgements consumers make in paying for professional advice. Solicitors score very highly, perhaps because the outcome from their services is tangible and immediately noticeable. Financial advice does not work in the same way and it is very difficult to persuade people that professional guidance, while not presenting an immediate pay off, will have a distinct long-term benefit. The work our profession has done to ensure it is RDR ready is a great start, but there is clearly a lot more work to do.
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