Press releases

INVESTORS THREATEN TO TURN AWAY FROM IFAs.

Simon Ellis - Managing Director, Legal & General Investments
Simon Ellis
Managing Director
Legal & General Investments

24 October 2012

Simon Ellis - Managing Director, Legal & General Investments
Simon Ellis
Managing Director
Legal & General Investments
  • 64% investors would stop using their IFA if they began charging an hourly rate

Research* from Legal & General Investments, one of the UK's largest investment providers, reveals that six in 10 (64%) investors say they would stop using their IFA if they began charging an hourly rate. Yet,more than a third (34%)admit that their financial adviser has the most influence on their investment decisions.

The findings come from Legal & General Investments' What Matters Investment Index which investigates investors' views of the market which is now in its third year.

Following the implementation ofthe Retail Distribution Review (RDR) in January 2013 just one in five (19%) investors said they would continue to let their adviser recommend investments while 41% will continue to only invest directly. Almost one in 10(7%) will start investing directly as a consequence of RDR.

Worryingly,a quarter (24%) of investors are unsure of how they will make investments in a post-RDR world.

The trend for self-investing evidenced in the research shows very little change from last year's results. In 2011 31% of investors admitted that their current method for making investment decisions is to do their own research and buy direct eschewing the services of an IFA. This fell to 30% in 2012.

Simon Ellis, Managing Director, Legal& General Investments, said: "The notion of paying for advice has been one of the main bones of contention for industry and investors alike since the announcement of RDR. Although a fee based model is supportive of a transparent relationship between and adviser and client, the level of consumer aversion to it at this late stage is concerning.

"The Legal & General Investments website can help make investing easier, acting as a 'go to' place for straightforward, easy to understand investment information from a trusted brand.

"Yet, for many, advice is still necessary and RDR presents a distinct challenge  for advisers to differentiate their offering. They need to highlight the added value they can bring to the table, both understanding and meeting the needs of a more demanding consumer."

Notes to editors

* All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2030 adults. Fieldwork was undertaken between 14th and 18th September 2012.  The survey was carried out online.

The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.

1. The Legal & General Group, established in 1836, is one of the UK's leading financial services  companies.  As at 30 June 2012, we were responsible for investing £388 billion worldwide on behalf  of investors, policyholders and shareholders.  We also have over seven million customers in the UK for  our life assurance, pensions, investments and general insurance plans.


For more information please contact:

Kimberley Robinson

Kimberley Robinson
PR Manager Legal & General Group

t: +44 (0) 203 124 2092
e: kimberley.robinson@group.landg.com


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