We’ve talked before of the dubious choice of investors trying to ‘go it alone’ and of the value of sound independent advice across all manner of financial needs.
So it is worrying that the numbers of people who sought financial advice last year dropped to only 9% apparently, a drop of 18% on the year.
Research by the Lang Cat agency has found 9% are now paying for advice, compared with 11% previously.
We feel this is for a number of reasons, but a very significant one is the escalated regulatory burden imposed on firms and advisers – all well-intended but having an almost inevitable consequence of less advice available at a financially viable price – and advisers leaving the market as it has all become ‘too much’.
This is the new ‘consumer duty’ legislation introduced by the Financial Conduct Authority (FCA) to enhance consumer protection in financial services. It requires firms to ‘prioritise their customers’ needs and act in their best interests’.
The Lang Cat survey found 80% of advisers felt the regulation actually made it harder for them to service their clients.
It has seen many clients with ‘low investable assets’ dropped because the new regs mean advisers can no longer take the time to deal with them.
More than half of advisers have stopped advising smaller net-worth clients, arguably the ones who would most benefit from wise counsel and an ongoing hand-holding.
It’s great when someone can take their own decisions but we come across so many cases when some advice (even when that is free) would make such a difference!
We have encountered more than one professional person such as accountants who nonetheless did not know all they needed to know about pension planning, or the many nuances of tax laws, allowances and investment options.
On top of that, we are finding that more and more investment opportunities are being barred from private investors who ‘do their own thing’ as well, as these assets can be seen as ‘high risk’ to the platform they use (such Crystal Amber and many REITs, that’s Real Estate Investment Trusts).
For us, such opportunities are usually even more compelling, as they are cheaper as a result and we can buy anything, without constraint.
Just what is the cost of ‘financial advice’ anyway? Presently we are willing to provide a complimentary overview of someone’s finances, without any obligation whatsoever.
On top of that, people can subscribe to our staunchly independent, managed investment strategies without any initial fees.
Yes, there are brokerage costs when assets are acquired in their strategies but that is the case everywhere (regardless of what they may say…) and yes, there is a management fee for looking-after the capital too as there is elsewhere but we also offer free financial planning updates, including tax-planning, etc.
We hope too we develop relationships so that our clients feel able to contact us about any financial or related legal issue they may have, within the service.
Presently we do not differentiate so even those with small sums can benefit regardless of what it costs us to look-after them.
