16 million UK savers could be stuck in a “financial advice gap”, according to the latest report by the Financial Conduct Authority.
The FCA have called on the industry to make financial advice more available for those that need it, after discovering that 85 per cent of investors were not willing to pay the high average cost of investment advice. The report also highlighted the issue that many financial advisers are unwilling take on clients with relatively small assets, leaving a large part of the population on a middle income unable to find suitable advice.
After the findings were released, the FCA leant their support to the new wave of ‘robo-advisers’ taking the investment world by storm. These platforms offer anything from online advice and guidance to their own investment platform and products, at a far lower cost than many brokers. Some sites are free, such as newcomer Investment Superstore, which aims to arm investors with all the information needed to make the most of their savings. Others, such as Nutmeg, offer an investment platform and a range of products in which customers can invest, for a fraction of the price an advisory service may charge.
In July, the FCA admitted the gap had widened since the introduction of new measures under the Retail Distribution Review, which aimed to increase transparency and lower the costs of receiving financial advice. However, it has led to many financial advisory services increasing their upfront costs and pricing out middle-income consumers.
