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New Market Study Published: Fee-based Advice in Financial Services: The Consumer Perspective

New Financial Services market report from Datamonitor: "Fee-based Advice in Financial Services: The Consumer Perspective"

 
PRLog - May 12, 2012 - Consumer willingness to pay for advice is a key issue in a number of national markets as calls for increased transparency and changing regulation make this a pressing topic. A legacy of so called "free" advice makes any shift towards a fee-only model a big change for many consumers. Providers therefore must understand what a target segment of consumers want and need from financial advice.

Scope

* Boost take up of fee-based advice by learning what consumers are looking for from a professional financial advice service.
* Improve customer acquisition with insight into the perceived barriers to seeking financial advice.
* Strengthen relationships with consumers through discovering the key concerns over their finances.

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Full Report Details at
- http://www.fastmr.com/prod/382292_feebased_advice_in_fina...
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Highlights

The willingness of consumers to pay for advice will be affected by their previous experiences of financial advice, their expectations, and the service that they are looking for. Consumer understanding of how advice is funded in a commission-based model may also be a contributing factor in their willingness to pay an upfront fee.

By exploring a range of global markets it is possible to identify the target consumers for a fee-only model of advice and assess the needs of these consumers as well as their willingness to pay for advice. By identifying the advice that consumers are most likely to need, advisors will be able to better target consumers with an appropriate offering.

Currently only a relatively small proportion of consumers have paid for financial advice. Across all the markets examined only 14.8% of consumers paid a fee last time that they sought advice. Any move towards a fee-only model of advice will therefore mean a huge shift in the consumer psyche.

Reasons to Get this Report

* What do a target segment of consumers look for in a professional financial advice service?
* What are the current perceived barriers to financial advice?
* How can providers attract consumers to a fee-based model of advice?
* Which factors will drive consumers' willingness to pay for financial advice?

Partial Table of Contents:

OVERVIEW

* Catalyst
* Summary
* Methodology

INTRODUCTION

* Professional advice helps consumers to make important financial decisions
* Professional advice can help to make better informed decisions
* Consumers with limited financial intelligence will benefit from professional advice
* The UK advice market is awaiting a major shake-up in regulation
* All models of advice have advantages and drawbacks for consumers
* Commission-based advice models may be biased towards the best-paying products or providers
* Fee-only advice models shift the focus onto the suitability of a product for individual consumers
* Paying a percentage of assets under management may also introduce bias
* There is a move towards a fee-only model to increase transparency for the consumer
* Consumers have access to numerous sources of financial advice
* Banks are the main source of financial advice globally
* Independent financial advisors can offer consumers a broader view of the market
* Peer-based advice offers consumers a "tried and tested" point of view
* Fee-only models will target more affluent consumers
* Affluent consumers will be the most able to pay for advice
* Providers of advice must consider both income and assets
* Consumer willingness to pay for advice is driven by a number of factors
* Convenience will play a part in where consumers go to seek advice
* Consumers need to trust the advice that they receive
* Consumers will find alternatives to any move towards a fee-only model of advice
* The cost of advice will have a clear effect on consumer willingness to pay

STRATEGIC CONTEXT

* In the target segment the majority of consumers have sought financial advice in the past
* Most consumers turn to their primary bank for financial advice across all markets
* Consumers seek face-to-face meetings with their financial advisor
* The majority of consumers have not paid a fee for financial advice in the past
* Savings and investments is the most popular area of financial advice among target consumers
* Half of the consumers in the target segment are likely to seek advice in the near future
* Target consumers in France are the most likely to seek financial advice in the next six months
* Target consumers will continue to turn to their primary banks for financial advice
* Funding their retirement is a pressing concern for consumers in the target segment
* Consumers in Singapore show the highest levels of concern for their personal finances overall
* Australian consumers are most concerned about their retirement income
* Swedish consumers view retirement as their key concern
* Retirement income and savings and investment needs are of equal concern to consumers in the US
* Spanish consumers are concerned about their day-to-day finances
* Target consumers in the rest of Europe demonstrate similar patterns of concern
* Target consumers must be made to understand the benefits of professional advice
* Australian consumers are among the least likely to have considered seeking financial advice
* Target consumers in the UK must be made to consider seeking financial advice
* Trust is a key issue for target consumers in France, Germany, and Italy
* In the US consumers are concerned that they do not have enough money to make advice worthwhile
* Target consumers need advice to ensure that they hold the correct products
* Pension holding is low given the concern among target consumers over their retirement income
* Target consumers have a high holding of savings accounts
* Target consumers have taken steps to protect themselves financially

STRATEGY IN FOCUS

* (Untitled section)
* Any move to a fee-only model of advice will see considerably more consumers paying for advice
* The UK RDR regulation will act as an example for other markets
* Advisors will need to explain the benefits of the fee-only model to consumers
* Paying a fee for advice has produced more satisfied customers
* Banks should continue to offer advice in the UK market
* Target consumers in Australia are already the most likely to pay for advice

Full Table of Contents is available at:
-- http://www.fastmr.com/catalog/product.aspx?productid=3822...

About Datamonitor

The Datamonitor Group is a world-leading provider of premium global business information, delivering independent data, analysis and opinion across the Automotive, Consumer Markets, Energy & Utilities, Financial Services, Logistics & Express, Pharmaceutical & Healthcare, Retail, Technology and Telecoms industries. Datamonitor's market intelligence products and services ensure that you will achieve your desired commercial goals by giving you the insight you need to best respond to your competitive environment.  View more research from Datamonitor at http://www.fastmr.com/catalog/publishers.aspx?pubid=1002

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