Less than 5% of UK consumers would be willing to pay £50 or more in return for advice on life and he...
Less than 5% of UK consumers would be willing to pay £50 or more in return for advice on life and health insurance, while generally seeking advice on purchasing cover.
Consumer research conducted by Swiss Re Life and Health revealed 62% of those surveyed were 'fairly' or 'very likely' to seek advice when taking out life assurance in connection with a mortgage, rising to 76% for pension advice.
Of the 62%, only 8% would be willing to pay more than £50 for advice. For pension advice only four out of 10 would pay and three-quarters of these would expect to pay less than £50.
Paul Hately, strategic develo- pment actuary at Swiss Re, suggested fee-based advice could disenfranchise part of the population: 'The harsh reality is few advisers could currently contemplate selling regulated products for a fee of around £50. This is a disturbing picture which, taken at its most alarming, suggests many of the popular, contemporary theories about how to access the consumer more effectively and provide appropriate protection and savings are potentially flawed,' he said.
The report welcomed the Financial Services Authority's plans for a 'menu' ' provided in the early stages of a sales process ' outlining the services an IFA offers. This would allow the consumer to choose how to remunerate the adviser, either through a fee or by commission.
'Consumers will have a much greater involvement in assessing the value of the service provided and will be encouraged to negotiate appropriate remun- eration more actively, whether through fees or commission. However, which ever way the advice is provided, advisers must still be adequately compen- sated,' added Hately.
Many consumers, according to Swiss Re's research, would feel more comfortable if the provision of advice could be separated from the sales process entirely.
