Just 10% of UK adults understand RDR
Just one in 10 of UK adults understand the country’s Retail Distribution Review, while almost three-quarters, 74%, say they have never heard of it, according to research conducted on behalf of SCM Private’s True and Fair Campaign.
The finding comes despite a 12-month information campaign by the UK government to raise awareness of the changes.
Almost a quarter, 23%, of UK adults are less likely to seek professional advice under RDR, or twice the number who said they would turn to a financial adviser.
A third, 33%, said the changes would have no impact on their decision to seek financial advice.
Just 10% of those already planning to seek financial advice in the next 12 months say they are more likely to go to a financial adviser under the RDR changes – on the basis of expectations of better quality and more impartial advice than before.
However, crucially more than a third, 36%, said they would be less likely to seek financial advice.
The True and Fair Campaign said this suggests a growing gap between those willing or able to obtain financial advice and those who are not. It pointed to figures from the UK FSA suggesting that 63% of independent financial advisers (IFAs) will be unwilling to offer advice to those with less than £20,000 in savings.
Gina Miller, founder of The True and Fair Campaign said: “Not only are many advisers unwilling to offer advice to smaller investors, but these savers are also being put off from seeking it, thereby exacerbating the ‘advice gap’ problem.”
“In order to get above-inflation returns for their savings in the current climate, consumers have to look at investments beyond cash-based savings and the industry cannot allow the law of unintended consequences to mean that RDR robs a generation of savers of independent advice at the very time when they need it most.”
The latest survey results are based on responses obtained in early January from more than 2,000 UK adults.