Brits won’t pay for investment advice

Three quarters of Brits would rather do their own research and make their own investment choices than pay someone else for financial advice, according to new research commissioned by fund supermarket Cavendish Online.

Brits won’t pay for investment advice

The survey also revealed that 56% would only pay for investment advice if it guaranteed they wouldn’t lose any money.

Just 7% of the 2,019 consumers who took part in the survey said they would be happy to pay up to £1,000 a year for professional investment advice; only 5% would be prepared to pay more than £1,000 a year.

According to IFA portal Unbiased.co.uk, the average cost of an initial review and report from an IFA is £500 whilst the average cost of advice for investing a £50,000 inheritance is £1500.

The Retail Distribution Review was introduced in 2013 and sought to raise professional standards in the industry and introduce greater clarity, especially on the types of fees levied by IFAs.

As the RDR has made the cost of advice more explicit, IFAs must charge a fee rather than taking a commission on new pension and investment products, more consumers are baulking at the cost.

Ian Williams, managing director of Cavendish Online, said: “It would appear that any adviser willing to offer a ‘no-loss’ guarantee could clean up, with more than half of consumers happy to pay for advice as long as it meant they wouldn’t lose any money.

“At present we’re unaware of any IFA so confident in their abilities that they offer this assurance to their clients.

“As well as choosing the right shares or funds, investors should also remember there are different routes to buy them and the charges levied by different platforms or services can have a significant impact on the performance of their investment.”

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