Chartered Insurance Institute (CII) research into consumers' views of the Retail Distribution Review (RDR) suggests a large untapped market of individuals who could be brought into financial advice for the first time as a result of the regulatory changes.
The CII's consumer survey, conducted to assess knowledge of the changes and their implications among the public, suggests that at least 5.3 million new customers who had previously ruled out financial advice are reconsidering it as a result of the RDR.
However, the CII believes this untapped market could be much higher if the regulator and industry did more to communicate the RDR benefits.
Taking the CII's survey sample as representative of the UK population, this means of the estimated 30 million adults who claim to have not received financial advice, just over half cited financial reasons such as affordability of advice and not having the funds to invest.
This leaves a market of about 14 million consumers who have the money to invest but have not to date considered advice, the CII suggested. The reasons given include a lack of trust, preference to use other sources, not considering advice and self-advising.
According to the CII's research, those most likely to reconsider advice in the light of the RDR changes are those who have not really thought about receiving advice on investments, and those who have previously preferred to self-advise.
The CII said that potential for more new customers, especially among the main target markets of those not normally considering financial advice, indicates a clear need to redouble efforts to convey the implications of the RDR and the value of financial advice among the general public.
The research found that awareness of the financial advice reforms among the general public has improved since 2011, with about a third of consumers who have never received advice being aware of the professionalism changes, up from less than a fifth in 2011.
Among those who have received advice before, half know about these changes. These people who are more familiar with the market already see the benefit - over 60% of those who have received advice before believe the RDR changes will improve their confidence, increasing to two-thirds among women respondents.
Laurence Baxter, head of policy and research at the CII, said: "Our intention was to gauge the success of communicating the RDR changes to the public, and to demonstrate how better achieving this could enhance the market.
"Although there has been progress since 2011, a better communication plan is needed if the market is really going to benefit from improved public trust and confidence which was a central objective of the RDR.
"Our research has revealed a great opportunity for financial planners among the unadvised population, to the tune of 5-14 million new consumers over time."
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