In a recent survey commissioned by insurer Aviva, only 3% of those questioned would pay over £100 per hour for advice from an independent financial adviser. Around 50% of those asked would ideally not pay anything at all (and in fact would rather not get any advice), and 17% would be prepared to pay less than £25 per hour.
This must be depressing reading if you are an IFA. Especially if your customers include the half of the 2035 people that ICM polled who would rather not bother with your services at all.
Ironically the pension mis-selling scandals of the 1990s seem to have both proved the need for good financial advice, and put the public off seeking it.
The survey does not report whether the respondents were questioned about IFAs being paid commission, or whether they appreciated that there must be a built in cost to the financial product to cover this.
So how can financial advisers turn this situation around, and win back the trust and respect of their customers?
The Financial Services Authority must be concerned about these results. After all, part of its mission is to help consumers get a fair deal, and to promote confidence in our financial services industry. Perhaps clients feel that financial advice has become much of a box ticking exercise, with forms being filled in to show that the adviser has gone through the motions to satisfy the regulator, rather than cutting to the chase and telling it like it is about the investment opportunities they are discussing. A plain speaking adviser who knows his stuff will always be valued by clients.
On another note, the Equality and Human Rights Commission has added its voice to the growing debate about scrapping the default retirement age, claiming that the country will suffer if we do not hang on to older workers. As Deputy Chairman of the EHRC, Baroness Margaret Prosser explained the theory behind the Commission’s Working Better Initiative.
“Britain has experienced a skills exodus during the recession, and as the economy recovers we face a very real threat of not having enough workers – a problem that is further exacerbated by the skills lost by many older workers being forced to retire at 65.
“Keeping older Britons healthy and in the workforce also benefits the economy more broadly by decreasing welfare costs and increasing the spending power of older Britons.”
The government has its own review into this issue coming out this year, and will have to tread a careful path between assisting older people to continue to earn their living, and giving employers the flexibility to manage their workforce as they see fit.
