70% would be deterred by a fee
The British public is unwilling to pay upfront for financial advice, suggests a new survey from the Association of British Insurers (ABI).
The organisation's quarterly consumer survey of 2,561 respondents found that 70% would be deterred from seeking financial advice if they were required to pay a fee up front. When asked how much they would be willing to pay, 48% said they would not pay while 26% said they would pay less than £50. Just 3% said they would pay more than £100.
When asked which products they would want help with from a financial adviser before purchasing, respondents cited mortgages (46%), stocks and shares ISAs (44%) and pensions (39%). Just 18% cited life insurance. Almost a third (29%) said they would not want help with any products, rising to 40% of those aged over 55.
From December 2012 when the retail distribution review comes into force, consumers will have to pay a fee to access investment advice.
In the wake of a Government consultation on the creation of "simple" financial products, the ABI also posed questions about the difficulties of purchasing from the financial services industry. The factor most cited as a cause of difficulty was "working out the best value for money" (74% of respondents cited it as the first or second biggest challenge).
When asked what sort of simple products they would like to see in the market, almost half (48%) of consumers voted in favour of "a standard (but limited) level of coverage amount products to aid comparison". Around a third (36%) selected "easy to understand terms and conditions - but a larger quantity of documents" and just 15% voted in favour of "very comprehensive coverage, with few exclusions - but likely to cost more".
Insurers and intermediaries working in the protection sphere have raised questions about the risks attached to simple products, pointing out that consumers who buy them may be unaware of the more comprehensive cover available.