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How consumers value advice: how much are they prepared to pay?

How consumers value advice: how much are they prepared to pay?. Prepared by Harris Interactive for:. Methodology. 25 face to face depth interviews approximately 90 minutes long with consumers who have used an independent financial adviser in the last 12 months

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How consumers value advice: how much are they prepared to pay?

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  1. How consumers value advice:how much are they prepared to pay? Prepared by Harris Interactive for:

  2. Methodology • 25 face to face depth interviews approximately 90 minutes long with consumers who have used an independent financial adviser in the last 12 months • The 25 depth interviews split between those who do/do not pay a fee for advice and those under/over 50 years of age • Including a mix of those with household investments of £25-49k, £50-99k, £100k+ Plus: • 2168 online Omnibus interviews with GB adults to achieve 747 interviews with respondents who use financial advisors • Field dates – 12th October to 22nd November 2 © Harris Interactive

  3. Consumers asked which services do they value most/least? © Harris Interactive

  4. Qualitative research – Value of task vs. rate prepared to pay MOST 1 2 3 4 5 6 7 8 9 10 Building an investment portfolio Initial meeting Trust Second meeting Researching the market Professionalism Monitoring investments Up to date valuations Continuity Conducting annual review Value Ranking Compiling reports Processing applications Admin Low Medium High LEAST Rate prepared to pay Base: 25 face to face depth interviews with consumers who have used an independent financial adviser in the last 12 months

  5. Most important tasks undertaken by Financial Advisers Q. In order to provide you with financial advice, an adviser has to undertake a number of different tasks. These are listed below. Please rank them in order of how important each one is to you in achieving what you are looking for from financial advice % of respondents selecting task as their © Harris Interactive Base: All respondents using financial advice able to perform rank-it exercise (723)

  6. Quantitative research - Importance of the Task vs. rate prepared to pay 60 50 40 30 20 10 0 % who selected task as top 1, 2, or 3 Low Medium High Rate prepared to pay Base: All respondents using financial advice able to perform rank-it exercise (723)

  7. How do they want to pay and what for - summary? • Respondents are prepared to pay most for building an investment portfolio and conducting annual reviews and are not prepared to pay for the initial meeting yet over half of respondents feel that the initial meeting is the most important • Only a minority favour an hourly rate for advice • Others feel it detracts from the relationship • It does not feel transparent • They do not know in advance how much the advice is going to cost • An upfront fee – whilst not palatable – seems the fairest way to go • A set fee based on investment value • Flexibility about how this is paid – out of investment/monthly instalments • Respondents also introduced the concept of differing rates to reflect the ‘experience’ and ‘seniority’ of adviser: • Whilst some are willing to pay a premium for continuity • Others feel it will be unnecessary to pay ‘top whack’ each time post RDR • If all I want is a trim, I don’t need to pay to see the top stylist © Harris Interactive

  8. www.skandia.co.uk Calls may be monitored and recorded for training purposes and to avoid misunderstandings. Skandia provides you with access to its investment platform, known as Skandia Investment Solutions. Within this platform you can open an ISA and Collective Investment Account provided by Skandia MultiFUNDS Limited, a Collective Retirement Account and Collective Investment Bond provided by Skandia MultiFUNDS Assurance Limited and an Offshore Collective Investment Bond, distributed by Skandia MultiFUNDS Limited but provided by Old Mutual International (Guernsey) Limited. Skandia Life Assurance Company Limited, Skandia MultiFUNDS Limited and Skandia MultiFUNDS Assurance Limited are registered in England & Wales under numbers 1363932, 1680071 and 4163431 respectively. Registered Office at Skandia House, Portland Terrace, Southampton SO14 7EJ, United Kingdom. All companies are authorised and regulated by the Financial Services Authority with FSA register numbers 110462, 165359 and 207977. VAT number for all above companies is 386 1301 59. Skandia Investment Group is a trading name of Skandia Investment Management Limited. Skandia Investment Management Limited is registered in England & Wales under number 4227837. Registered Office at Skandia House, Portland Terrace, Southampton SO14 7EJ, United Kingdom. Authorised and regulated by the Financial Services Authority with FSA register number 208543, VAT number 386 1301 59. Old Mutual International (Guernsey) Limited is regulated by the Guernsey Financial Services Commission and is licensed to write long-term business under the Insurance Business (Bailiwick of Guernsey) Law 2002. Registered number 2424. Registered Office at Albert House, South Esplanade, St Peter Port, Guernsey GY1 1AW, Channel Islands.

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