Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • October 2015
10

Cost of financial advice needs to be 'radically reduced' 

Open-access content 30th October 2015

Citizens Advice is urging a UK government review to explore how to radically reduce the costs of advice for people who don't have a big budget for help.

A piggy bank and a calculator © Shutterstock

30 OCTOBER 2015 | BY CINTIA CHEONG

The charity said the average cost of advice for taking a flexible income from a pension pot of £61,000 would be £1,490, and the figure was "significantly more than most people are willing to pay".

The charity's call, based on a number of surveys, is being fed into an inquiry by the Financial Conduct Authority and the UK Treasury called the Financial Advice Market Review (FAMR).

Gillian Guy, chief executive at Citizens Advice, said the market needed to adapt to those without a "big budget" for financial advice. 

She said: "High quality, in-depth advice from IFAs [independent financial advisors] has an important place at the top end of the market, and likewise free guidance plays a vital role in informing consumers. 

"But there is a real gap in-between. Reviewing the regulatory burden on financial advisers, while ensuring consumers remain protected, could enable more people to access the advice they want at different prices levels."

Only one in 50 would pay more than £1,000 for advice for a pension pot worth £61,000, said the charity.

A survey of more than 2,000 adults by YouGov found one in six (16%) would be willing to pay between £200 and £1,000. One in three (29%) would pay up to £200 and another 30% would not be willing to pay for advice.

A separate survey by ComRes found more than half of consumers with defined contribution pensions wanted expert help with how to withdraw savings. 

Based on responses from 1,386 people aged 50 and over with a defined contribution pension, the survey revealed free guidance from Pension Wise and paid-for IFA advice were the two places people would be most likely to turn to for help. 

Citizens Advice said there was a clear relationship between these two types of support because 44% of people who planned to pay for advice also wanted a session with Pension Wise.

The FAMR will close on 22 December and it aims to produce proposals ahead of the budget in 2016.

This article appeared in our October 2015 issue of The Actuary.
Click here to view this issue
Filed in:
10
Topics:
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Actuarial Analyst - Lloyd's Pricing

London (Central)
£40000 - £60000 per annum + benefits
Reference
119072

Move from Reserving/Capital to Lloyd's Pricing? Get in touch...

London (Central)
£40000 - £55000 per annum + benefits
Reference
119071

Senior Validation Actuary - Lloyd's

London (Central)
£100000 - £140000 per annum + benefits
Reference
119070
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200