The professional services firm’s ‘Bridging The Advice Gap’ report claimed 11% of UK adults, or some 5.5m customers, are unwilling or unable to pay for financial advice.
Under RDR, the adviser charging regime requires clients to pay a fee when an adviser makes a recommendation to invest in a retail investment product, rather than commission being paid by the product provider.
This is expected to cause significant changes in the priorities and behaviour of both advisers and retail investors.
In addition to identifying 5.5m “advice orphans”, Deloitte’s research suggested that 56% of clients would reduce their use of financial advisers if they were charged a fee of between £400 and £600.
Andrew Power, lead RDR partner at Deloitte, said: “The RDR will affect a huge number of people in the UK and could create 5.5m advice orphans – consumers who require financial advice but who are unable or unwilling to pay for it.
“The challenge and opportunity for banks, insurers and fund managers is to bridge this gap by developing business models that allow them to deal directly with customers and by offering streamlined, lower-cost advice.”
Deloitte’s study also claimed 32% of UK adults, or about 16m people, own a retail investment product to which adviser charges apply, with 46% of these using an adviser to buy the products.
