77% of investors would consider switching adviser

Just under 80 per cent of investors admitted they would switch financial adviser if they felt they were not receiving value for money, according to data published by AFH Wealth Management.

Of those that would switch adviser, 16 per cent claimed they already have done so, suggesting that the need for advisers to demonstrate good value for money is crucial and not doing so could be detrimental to their business.

AFH Wealth Management’s findings, published in its What Price report, indicated that since the financial crash a decade ago, there has been a shift in consumer behaviour, with a third of investors now recognising the value of financial advice.

Despite this, 16 per cent stated they do not trust financial advisers but understand that they need them, while 12 per cent claimed to be more involved in their financial decision-making because they do not trust their advisers.

However, nearly half (46 per cent) of investors said it is the honesty from their financial adviser that gives them confidence in the advice they receive. For two fifths of investors, their adviser’s familiarity with their financial situation is what instils their confidence, while 37 per cent said it was previous performance and 36 per cent claimed it is maintaining open lines of communication.

Commenting on the findings, AFH Wealth Management CEO Alan Hudson said: “In order to demonstrate the value of proper advice, it is crucial that advisers understand exactly what investors want. Top of this list is honesty, be it about fees, charges or investment performance.

“As investors become increasingly discerning with a greater propensity to switch and new advice models enter the market, the value and effectiveness of face-to-face advice will continue to be challenged. We, as an industry, must demonstrate value and give investors confidence in the actions we take and decisions we make.”

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