Most financial advisers plan on cutting off service to some of their clients within the next year because they can no longer afford to service them.
A survey of 122 advisers by investment platform Rplan found that 56 per cent of them intend to stop servicing certain clients in the next 12 months because they are no longer commercially viable.
Rplan suggests that this could be the result of the Retail Distribution Review, a shake-up of the rules surrounding financial advice that banned advisers from earning commission, and required them instead to demonstrate ongoing service to justify continuing fees.
The 'advice gap' may have seen millions lose access to professional advice because of high costs, but how can you find financial advice without paying through the nose?
One Suffolk-based IFA who wished not to be named said that pre-RDR he would happily take on a lower-value client and review their investments on a more informal, 'popping by when in the area' basis.
However, now that his firm requires stricter promises of annual reviews, he says the money he would make from - for example - someone wishing to put a £15,000 windfall into an Isa would not justify taking them on as a client.
Although he might accept their business initially, he would have to tell them they probably wouldn't hear from him again.
The Rplan research found that 43 per cent of respondents have already restricted services to clients, and one in three have increased their minimum portfolio size for investors.
Of those who have increased their minimum portfolio size, 81 per cent now require investments of at least £30,000, and about half require a portfolio of at least £50,000.
Stuart Dyer, chief investment officer for rplan, says: 'Although the introduction of RDR was needed, a negative side effect is that many financial advisers have either left the market, or will now only focus on investors with larger portfolios. This... increases the chances of people making no investment at all, or the wrong ones for them.'
The alternative for those prepared to choose and run their own portfolio comes in the form of investment platforms such as rplan, our sister website Interactive Investor or Hargreaves Lansdown.
Money Observer's handy, comprehensive guide to online broker fees hopes to help you find the best platform for you.
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