According to the BlackRock Investor Horizons Survey, just 35% of British consumers are willing to pay a fee for financial advice. Some 68% admitted that they do not know if they currently pay for advice.
Furthermore, the poll discovered that 28% of people are willing to pay £25 an hour for financial advice – making it the most popular amount – while 18% would just pay £10 an hour.
Stephen Crocombe, BlackRock’s head of product development in Europe, the Middle East and Africa at BlackRock, said: “I don’t know what kind of advice you’re going to get for £10 an hour, but if you look at other services, you can’t getting guttering cleaned for £10 an hour and you can’t get a haircut for £10 an hour.
“People are generally willing to pay less than they would for other services when it comes to financial advice. I think that’s a challenge for the industry to get over and a challenge for people to show the value of financial advice.”
The survey comes as the RDR implementation date looms and debate heats up over the size of the ‘advice gap’ that will be left when the ban on commission payments to advisers by product providers comes into force.
The survey also showed a general lack of investment among the UK population, with 77% of respondents currently saving in cash or deposit accounts rather than investment products. Some 36% said they were holding more cash than one year ago, while 47% said the main reason for holding cash was in case of an emergency.
In addition, 59% do not plan on making any changes to their financial preparations, while only 13% are actively adjusting their portfolio. The research also found 58% of people describe themselves as ‘risk averse and unwilling to take risks”, with less on one in five being comfortable taking on higher risks to achieve better returns.
Crocombe said: “We found pessimistic investors that are in a state of shock.” He added that many of the factors causing this pessimism revolve around macro issues such as the general health of the UK economy or the job market and a sense of distrust in the financial services industry.
Looking at what would encourage people to pay for advice, the survey revealed that 52% say nothing would make them willing to pay a fee.
However, 27% said confidence that advice is fully independent would encourage them to pay for advice, 21% cited an open, transparent charging structure and another 21% want suitably qualified advisers.
The BlackRock Investor Horizons Survey polled a sample of 11,000 investors aged between 25 and 75 years from six countries , with more than 2,000 coming from the UK. The research was carried out by YouGov between 13 September and 3 October 2012.
