Advisers split on catering for less wealthy clients

Financial planners agree the RDR will encourage a focus on more wealthy clients - some believe this is the way to go but others feel a duty to redress the balance.

Brigid Benson of the Gaeia Partnership in Manchester told the New Model Adviser® conference this month that the RDR would lead to the creation of an IFA ‘elite’ who do not want or cannot afford to give advice to lower or middle income earners.

Dire social consequences

Sheriar Bradbury, director of Bradbury Hamilton, agreed that the RDR could have disastrous social consequences even if it was positive for his firm. ‘From a personal perspective it has to be a positive. From a social point of view it’s a disaster,’ he said.

London-based Bradbury, along with many IFAs, said he was worried about the number of middle and lower income clients going to banks for advice.

‘It is clear that people are going to them because it’s their savings bank; even though the products need a lot more scrutiny… yet banks have shown that they have difficulty sustaining relationships with people.’

But Bradbury said the incentive to advise high-net-worth clients was not just down to their wealth.

‘At the lower end of the market products have to be sold. But high-net-worths seek out products to match their requirements,’ he said.

David Batchelor, director of Wills and Trusts IFP in Aylesbury, said those with less income were also more likely to be put off by having to pay a fee for advice. ‘Its hurts more to write a cheque,’ he said.