Should advisers offer pay-as-you-go plans?
Will demand for fixed fees put traditional charging models under pressure?
Customers are interested in fixed fee models
One of the most common questions we hear from Boring Money readers is whether they really need to be paying 1-2% on an ongoing basis for financial advice.
Clients are generally happy with their adviser – our latest Advice Report shows that 90% of advised investors report they’re satisfied with the service they get. Nonetheless, many still ponder whether they might be better off on a pay-as-you-go deal.
Around a third of advised investors we surveyed for the Advice Report said they’d be interesting in paying a set fee for advice as and when they needed it. And our data shows the lack of fixed-fee options is a considerable turn-off for investors that aren’t advised today but who would like to be in the future.
The fixed-fee filter in our new Boring Money Advice pilot is also proving to be one of the most popular methods people are using to search for a financial planner.
There is clearly interest from consumers and a number of firms are offering alternatives to the typical percentage ongoing charge. These include digital providers offering one-off advice for a set cost and face to face financial planners with a flat annual charge regardless of how much you have invested.
If you’re reviewing fee models and thinking about how best to structure them for your business, speak to us about our research to understand what clients are looking for in advice fees.
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