A survey conducted by investment management company Legg Mason has found that only 24 per cent of investors would be prepared to pay the typical hourly fee for financial advice – which works out on average at £150 per hour, according to unbiased.co.uk.
Just 10 per cent of those who answered said they would be willing to pay £150 or more, while an additional 11 per cent agreed that they would pay between £50 and £149.
Over a third of respondents (36 per cent) said they would refuse to pay for financial advice outright, while 15 per cent said they were unsure what they would be happy to pay.
‘Despite a challenging global investment environment only a worryingly small percentage of UK investors say they are prepared to pay the going rate for investment advice,’ said Justin Eede, head of Europe and Americas distribution at Legg Mason.
The survey also noted a generational difference between those who were willing to shell out for advice and those who were not.
Millennials were on the whole prepared to pay for an adviser before making an investment, with 83 per cent saying they would pay for advice. This is in stark contrast to the baby boomer generation, of which 52 per cent said they would refuse to pay for counsel from an expert.
Eede added that the generational difference might be explained by a recent shift in the UK’s advice landscape caused by the Retail Distribution Review (RDR). The adoption of the RDR in 2012 meant that consumers now pay directly for advice, which is something older investors are not accustomed to.
Eede continued: ‘In the post-RDR world it is perhaps unsurprising millennials are more open to paying for advice, whilst older generations- who were not previously paying advisers directly – are less keen to do so.
‘With the rise of robo-advisers and other online platforms, the notion of paying for face-to-face advice could come under further pressure. However, the fact millennials are far more likely to pay for advice than older investors suggests a brighter long-term outlook for a sector that plays a valuable role in society.’