64% investors would stop using their IFA if they began charging an hourly rate
Research from Legal & General Investments, one of the UK's largest investment providers, reveals that six in 10 (64%) investors say they would stop using their IFA if they began charging an hourly rate. Yet, more than a third (34%) admit that their financial adviser has the most influence on their investment decisions.
The findings come from Legal & General Investments' What Matters Investment Index which investigates investors' views of the market which is now in its third year.
Following the implementation of the Retail Distribution Review (RDR) in January 2013 just one in five (19%) investors said they would continue to let their adviser recommend investments while 41% will continue to only invest directly. Almost one in 10 (7%) will start investing directly as a consequence of RDR.
Worryingly, a quarter (24%) of investors are unsure of how they will make investments in a post-RDR world.
The trend for self-investing evidenced in the research shows very little change from last year's results. In 2011 31% of investors admitted that their current method for making investment decisions is to do their own research and buy direct eschewing the services of an IFA. This fell to 30% in 2012.
Simon Ellis, Managing Director, Legal & General Investments, said: "The notion of paying for advice has been one of the main bones of contention for industry and investors alike since the announcement of RDR. Although a fee based model is supportive of a transparent relationship between and adviser and client, the level of consumer aversion to it at this late stage is concerning.
"The Legal & General Investments website can help make investing easier, acting as a ‘go to' place for straightforward, easy to understand investment information from a trusted brand.
"Yet, for many, advice is still necessary and RDR presents a distinct challenge for advisers to differentiate their offering. They need to highlight the added value they can bring to the table, both understanding and meeting the needs of a more demanding consumer."
Simon Ellis,
Managing Director, Legal & General Investments
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