One in two financial advisers ‘fire’ customers with less than £50,000

Published by Tom Bailey on 14 December 2017.
Last updated on 14 December 2017

One in two advisers ‘fire’ clients with less than £50,000

Customers with investments of less than £50,000 are increasingly being turned away by their financial advisers. In 2014 just under a quarter of financial advisers showed customers with this level of assets the door, whereas in 2017 this figure rose to one in two advisers,  according to new research by Schroders.

In total, one in four financial advisers asked clients to leave their practice in 2017 for not having enough money.

The research, based on a survey of 250 financial advisers, showed that the number of customers that advisers are no longer choosing to service has steadily grown over the past few years, with some customers being asked to leave if they have less than £100,000 or £200,000. 

The findings raise further concerns about an ‘advice gap’ – a growing amount of the public going without adequate financial advice for managing their savings.

This growing gap was recently acknowledged by FCA chief executive Andrew Bailey at a speech at Mansion House.

Rule changes in 2012, known as the Retail Distribution Review, have inadvertently contributed to the advice gap. The new rules banned the paying of commission to financial advisers by fund managers and instead required advisers to charge their customers explicitly. 

This meant that for many advisers, clients with smaller assets were no longer deemed profitable enough to service.

 

The commission ban, however, has not been the only factor in the growing financial advice gap. 

According James Rainbow, co-head of UK intermediary at Schroders, it is also part of a longer-term trend. Over the past few years, he pointed out, the number of financial advisers in the UK has steadily declined. At the same time, he notes, the demand for their service has increased, particularly with the growth of personal pensions, thanks to the pension freedoms. 

"It is a labour-intensive process. There is only a certain number of clients’ financial advisers can provide regular service to," he said.  

This article was originally published on our sister website Money Observer.

Read more about financial planning on Moneywise

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Looks like the so called

Looks like the so called Advisors are getting Greedier by the day.

I am surprised to read that

I am surprised to read that people with less than 50k net assets would even consider paying for financial advice, the service shouldn't even be available to those with less than 25k in my view. The decision to stop Fund managers paying commission to them though is the right one though, financial advice isn't essential and so others shouldn't have to pay for it if they're not receiving it. The person receiving it should pay directly since it's an optional extra. Although research shows that those who receive financial advice are on the whole better off (I believe I read that in a Moneywise article previously), it's far more satisfying to spend the time and effort researching things yourself and making your own decisions, any gains made in this way will be much more pleasing I think. If anyone is reading and has less than 50k net assets, my advice is to subscribe to the Moneywise newsletter which is free and read the expert articles, by doing this alone you can make a start and put together your own plan to manage your spare cash and existing debt, you don't need to pay someone to tell you, seek advice from family, friends and colleagues instead if stuck on something. You'll see that after making a start and developing an interest you'll quickly become better and more efficient at managing your own portfolio.

my expereince of Financial

my expereince of Financial Advisors has not been great and their charges are very high. They don't give advice any better than research done by yourself. For example, ok you get charged for each share deal by the online platforms, the deal charges are approximately ~£12 across the board, bearing in mind I have been asked for £500 pounds to change the funds in my personal pension (which is something I can do online with the provider) I could do quite a lot of deals and build up my portfolio and spend the 500 that way, one good year of growth and my money is paid back and probably more

The Best person to look after

The Best person to look after your money is nobody but only you yourself. The so called Financial Advisors are there only to see what they can skim off your money, and they do this by very devious means hidden under the so called advice. Do a bit of your own research, and you can do much better than many of them. Any sensible person will take a lot more care to look after his or her money or any assets than rely on someone. This is the normal in life. When others are involved, their first or hidden agenda is "What is in it for them".