Many UK consumers are making big financial decisions on their own as they struggle to access financial advice. Auto-enrolment and changes to pension access have given people more control than ever over their savings. The demand is there, so why are financial advisers missing out?
In the past, financial advisers and wealth managers were able to take commissions from the products that they recommended, but in 2012, the Retail Distribution Review changed all that. Now, these individuals have to charge fees directly to the customer with the intention of bringing about greater clarity on the cost of advice and raising professional standards.
The downside is the creation of the “advice gap.” To tackle rising costs, many advisers increase their investment minimums, shutting off those with smaller amounts to invest. Some consumers are also unwilling to pay the fees and would rather go it alone instead.
An opportunity for financial organisations
Clients might seek pension advice allowance recommendations or be curious about independent financial adviser fees – many might simply want general financial help if their circumstances are changing. Either way, there is no doubt that demand is high. However, in 2015 the Citizens Advice Bureau published figures showing the reluctance of investors to access advice at the prices that many larger wealth managers charge.
The same report found that up to 5.4 million more people would think about paying for advice if it cost less. Smaller regional companies may be able to offer the right incentives to access this untapped section of the market by opening their services to those whom larger companies will not consider.
The number of UK advice and investment organisations is steadily growing, so those who act sooner rather than later should be in the best position to take advantage while the gap still exists. The challenge, as ever, is connecting the right potential customers with the right advisers, something that Lead Tech has been experts in for ten years.
Grow your business with Lead Tech
Lead Tech provides high-quality leads for the financial advice, equity release, retirement and private medical insurance markets.