There are now seven times more car mechanics than financial advisers.
The number of financial advisers has fallen sharply in response to the implementation of the retail distribution review.
And fears are growing that not only are advisers falling by the wayside, but that consumers are turning more and more to ‘DIY investing’.
Jasper Berens, head of UK funds at JP Morgan Asset Management, told the Financial Times: “The new RDR regulations have made consumers more aware of the advice they get, which is a good thing.
“But there are some people who think it is now more cost effective to make their investments themselves, without help.”
And Patrick Connolly, a certified financial planner at independent financial adviser Chase de Vere, agreed: “You can’t really argue with more transparency over fees and better qualifications for advisers. But it does mean that, as people realise they are paying for advice, they may think they are better off without it, which can be a problem.”
RDR was nearly seven years in the making – and could potentially transform the way people invest and save.
The first stage of RDR, adopted in January of this year, forced asset managers to stop paying commisions – which were often hidden from clients and investors to financial advisers, and instead clearly outline their charges for managing money and giving advice.
Financial advisers are also now subject to tougher qualifications.
The second stage of the RDR reform, to be brought in next April (2014), will force platforms to make their fees more transparent too.
Many financial advisers have fallen by the wayside with the introduction of RDR.
According to the Financial Conduct Authority (FCA), there are now 32,690 financial advisers.
This compares with 41,000 two years ago says the Association of Professional Financial Advisers, although the latest FCA data does show numbers have risen slightly in the last few months.
There are now seven times more car mechanics than financial advisers in the UK; six times more housebuilders; and nearly four times more plumbers according to the Office for National Statistics.
Hugh Mullen, the managing director UK at Fidelity Worldwide Investment, told the FT: “Most people would not dream of repairing their own car, or fixing their own plumbing, yet it seems more people are deciding against financial advice to save on fees.”
That can be a dangerous path to tread.
Here at Lifetime we were already well prepared for the advent of RDR at the start of this year, and so the change went ahead seamlessly.
We practice what we preach:
Service, Service, Service
Building strong, lifetime relationships
Overall, helping people to reach their financial goals throughout their life is at the heart of what we do. We continually support clients to refresh and renew their financial plans, to keep them on the right track, and to ensure that their financial plans go hand-in-hand with their life plans.
So don’t go it alone. There are financial advisers willing and ble to help.