High fees to restrict access to advice

Recent research published by Aviva adds more fuel to the debate about client services and fees triggered by the Retail Distribution Review.

ICM carried out a study among 2,000 consumers at the end of 2009 for Aviva and found that only 3% of consumers will be willing to pay £100 or more per hour for independent financial advice. About half of the consumers surveyed would be unwilling to pay any fee at all.

In contrast Aviva’s research amongst advisers found that most advisers plan to operate on an hourly basis to comply with the RDR. The range of fees proposed varies from as little as £50 per hour to over £400 per hour.

As a result of this research Aviva believes that the majority of customers will be unwilling or unable to pay these fees and consumer access to advice will decrease post 2012.

At Planning for Life we don’t specifically charge by the hour, instead preferring a retainer fee depending on the level of service provided. This is paid per month irrespective of the work we do for a client during that month, but is designed to pay for our work over the full annual planning cycle.

In a related story Bluefin Advisory Services, a large wealth management and advisory company, have declared that they expect all their advisers to obtain full Level 6 qualifications and work on a fee basis from May this year. As a result Bluefin expect the number of advisers working for the group to halve from 180 to 90 in the next four months.

So the picture we see emerging is one of reducing numbers of advisers with those staying in the profession charging fees nobody really wants to pay.

As usual we would be interested to hear your views on the whole question of advice, how it’s paid for and what as consumers, you want to get and pay for. Comments are welcome in the box below.