Even fewer affluent individuals (4%) are likely to want a fully discretionary service, while 40% will approach financial advice in a task-based manner.
JPM’s report, Winning Propositions: The consumer market post-RDR, is based on a survey of over 2,000 mass affluent to high net worth individuals whose household net income was at least £50,000 per annum.
It predicted that 81% of £50,000+ household earners will seek professional advice to some degree in the post-RDR market, but only 13% would seek specifically to pay for an ongoing advisory service.
Taking the nation as a whole, JPM roughly projected that over 800,000 households in the UK (that earn £50,000+) may be interested in seeking out an ongoing advisory service and a further 2.4m households might be interested in receiving advice on a task-by-task basis.
“For those firms that are willing to explore new approaches to delivering advice and financial planning such as task-based advisory services, we believe the potential market is extensive and exciting,” the report continued.
But the most sought after client segment (those looking for an ongoing advisory service) will be hard fought for and firms hoping to attract these clients will need to display certain attributes, JPM said.
It sees the most successful firms post-RDR as those attracting and retaining clients through:
- Demonstrating an immediate and deep understanding of individual clients and their needs and commitment to acting as a ‘trusted’ adviser;
- Having a strong focus on pensions and/or enabling clients to achieve a secure retirement;
- Being proactive in portfolio management and alerting clients to market and financial events that may affect them;
- Demonstrating measurable results and benefits to clients;
- Offering fixed fees or at least give clients a clear and finite cost for their services.
For a full copy of the report, click here.
