Investor majority would dump IFAs who move to fees, says L&G
A survey by Legal & General Investments (L&G) has found 65% of investors would stop using an IFA who moved to hourly fees.
The news comes after the asset manager’s ‘What Matters Investment Index’ found 57% of advisers expect a rise in ‘DIY investors’ in the coming year.
Simon Ellis (pictured), managing director at L&G, says: “We already know that IFAs are expecting to see a rise in DIY investors in the next 12 months.
“Our research now shows that consumers are planning to stop using the services of IFAs altogether if they begin charging by the hour, which supports the assertion that the total cost of investing for a consumer will go up in the post-RDR world.”
Ellis says: “The implications for both the industry and consumers cannot be underestimated. Investors run the risk of eschewing advice due to its cost which could severely affect the investment decisions they make.
“The benefit of good quality, independent advice can be invaluable when considering your investment portfolio, especially in today’s volatile market.”
He adds: “There is room in the market for both advised and non-advised sales. However, we cannot risk pushing consumers towards the latter by necessity rather than by choice.”
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