Royal London launches its ‘Meaning of Value Report 2024’ which shows an increase in the positive sentiment clients have on their experience with their adviser.
New research reveals that for the second year running, consumers who pay for advice say they receive ‘good’ or ‘excellent’ value for money from their adviser. This sentiment has increased by more than a fifth moving from 54% in the 2023 study to 66% according to the latest Meaning of Value Report from Royal London.
The 2024 Meaning of Value report, from the UK’s largest mutual pensions, protection and investment provider, shows that overall satisfaction is positive amongst advised customers with 74% suggesting their satisfaction level ranges from good to very satisfied. However, advisers have a tricky balance to strike between demonstrating tangible and intangible benefits. Consumers value a combination of both tangible measures (such as investment returns and making money) alongside the intangible such as peace of mind and a sense of security.
This is especially true for investment performance, where the research shows some misalignment between what our adviser panel judged as being important to their clients, and what our consumer research2 showed were people’s views on what aspects of an advised service are of value. The data showed that 45% of consumers who have an adviser say investment performance is the most important factor for them when assessing overall value for money, but only around a quarter (24%) of advisers believed it has a big impact3.
When looking at the overarching important factors for both financial advisers and their clients when they’re considering which financial service provider to choose for their needs, the study showed a strong alignment of views, with the importance of service the standout consideration. Both the adviser and consumer responses identified the same top four aspects that were most important when selecting a financial service provider. Consumers want good service, from a provider they can trust, with good investment returns all at a competitive price. These results are very similar to the findings from the previous study where good service, investment returns and a competitive price formed the top three.
Commenting on the report findings; Jamie Jenkins, Director of Policy and Comms at Royal London said:
“Now we’re into the second year of our Meaning of Value analysis, the key trends of how value is perceived are becoming more distinct and we can see some early signs of improvement in certain areas. It’s encouraging that we and the wider sector are looking at value in a new light and continue to make strides in the right direction.
“Inevitably, there are still some persistent concerns among advisers as to how best to measure value, and to demonstrate this in a way that satisfies the requirements of the regulator. However, it appears that many advice firms have been reassessing their client proposition. This could be driven by a number of factors including the introduction of the Consumer Duty or the regulator’s review of ongoing advice services, but it’s clear that something is working, as there is a significant uptick in client satisfaction.
“Overall, we can start to paint a picture of how the perceptions of advice change, with many people starting their journey simply looking to address a particular financial requirement but then realising the much greater benefits of a holistic, goals-based approach to their later life finances.
“As the FCA moves forward with the Advice Guidance Boundary Review, the hope is that more consumers can be provided with meaningful guidance, ultimately leading to an increasing number of people seeking advice when the time is right.”
Mike Barrett, consulting director at the lang cat added: “Our annual research into The Advice Gap has consistently highlighted somewhat of a paradox, whereby those who pay for advice are more than happy it represents good value, yet those who are not believe it won’t be. Our work with Royal London highlights this first point. The advice profession is consistently delivering good value to their clients, and those who are
lucky enough to benefit from advice are almost always satisfied with the outcomes they are receiving.”
