A third of the UK’s highest earners trust the recommendations made by their independent financial advisers (IFA), according to figures published today (May 9th).
IFAs proved more trusted than banks, accountants and stockbrokers, among others, in the latest millionaire monitor survey from Skandia UK.
With IFAs the second most trusted source for financial advice, the number one trusted source among millionaires was their own judgment.
Around 25 per cent of respondents said they trusted banks, while the government and tied agents and advisers came in bottom of the poll.
Skandia UK’s head of investment Graham Bentley said: “The use of financial advisers by the UK’s wealthiest demographic demonstrates that there is a continued desire for quality investment and financial planning advice.”
The results showing financial advisers as a more trusted source of guidance was consistent with a millionaires’ survey carried out in June last year.
Mr Bentley suggested this was good news in light of the incoming regulatory changes, such as the switch over to the twin peaks model when the Financial Services Authority (FSA) will be replaced by the Financial Conduct Authority and the Prudential Regulation Authority.
He said: “With the upcoming regulatory changes affecting the financial landscape it is encouraging to see that high net worth and influential customers recognise and value the importance of seeking financial advice from qualified advisers."
Skandia Investment Group today suggested that risk targeted funds could be implemented to help IFAs overcome the risks associated with portfolio drift.
The group suggested breach of FSA rules could be avoided as risk targeted funds “are specifically managed to stay within set volatility parameters”.
The regulator expressed concern that an asset-allocation approach to building portfolios could move out of alignment the risk profile of the client and the fund in its paper on Centralised Investment Propositions.
Posted by James Harrison