More than 75% of UK investors would refuse to pay the going rate for financial advice, finds Legg Mason survey

More than three-quarters of UK investors would refuse to pay the going rate for financial advice, a survey by Legg Mason Global Asset Management has revealed.
Legg Mason’s fifth annual Global Investment Survey, which polled over 15,000 investors around the world, found 76% of UK investors would refuse to pay the typical hourly fee for financial advice. The average fee in the UK is £150 per hour, according to unbiased.co.uk.*
Only 10% of respondents said they would pay £150 or more for financial advice, with over a third (36%) refusing to pay anything at all.
Of the remainder, 29% said they would pay a maximum of £49 per hour, while a further 11% said they would pay between £50 and £149.
The survey also uncovered confusion over how much advice should cost, with 15% of respondents saying they were ‘not sure’ what they would be willing to pay.
Interestingly, baby boomers were the least keen to pay for investment advice, with more than half of respondents in this category (52%) stating they would refuse to pay anything at all to an adviser. Just 2% said they would pay £150 or more per hour for advice.
Millennials were far more disposed to paying for advice, with just 17% ruling it out completely. Nineteen per cent said they would be willing to pay the going rate of £150 per hour or above.
Justin Eede, Head of Europe and Americas Distribution at Legg Mason, said: “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.”
The results come in the wake of a fundamental shift in the UK’s advice landscape caused by the Retail Distribution Review (RDR) in 2012.
Prior to the adoption of the RDR, consumers in the UK were not used to paying directly for advice, with the commission system seeing product providers pay advisers directly.
Eede said: “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.”