Good luck finding financial advice – unless you have more than £100,000 to invest

Concerns are growing that thousands of investors are being denied access to unbiased independent financial advice following a key rule change banning the payment of commission.

Because advisers now need to charge when giving investment advice – fee levels can be more than £160 an hour – they are focusing on very high-net-worth individuals, demanding that would-be clients have large sums to invest and, in effect, turning many "middle Britain" clients away.

"It has become apparent that an increasing number of IFAs are rejecting clients who don't have more than £50,000 of investable assets, which is the vast majority of people in the UK, as they are deemed commercially unattractive," said Mike Coady of the deVere Group. And even those with more than £50,000 to invest can find it difficult to find advice.

"I have heard of instances of people with more than £100,000 to put away being turned away from financial advice or in other cases people with a very specific one-off needs, such as inheritance tax planning when the individual is in their eighties, being told they will only be advised if they sign up to expensive annual financial reviews, which is high-cost overkill," said Gina Miller, the director of SCM Private, and a leading figure in the true and fair campaign for transparent charging.

Investment firm Fidelity said its research shows over half of Britons looking for financial advice have insufficient funds to make it "commercially viable" for an advisory firm to touch them. "Without access to the information they need to help them make decisions, there is a risk savers could make the wrong choices or, worse, be put off saving altogether," said Mark Till, the head of personal investing at Fidelity.

And there seems to be a big difference in what people are willing to pay for advice and adviser charges. Fidelity found 49 per cent of people looking for advice would be happy to pay fees of £50 an hour while only 7 per cent of advisers have any plans to charge this low. Consumers who are being effectively barred from financial advice have little option but to make their own investment choices, often using "execution only" stockbrokers and investment platforms.

"The pressure on advisers to press their clients to invest unwisely may well be eased in the absence of commission. On the other hand those with a modicum of wealth may choose to elect their own investments when faced with a £250 per hour charging rate," said Stephen Gilchrist, the chairman and head of regulatory law at Saunders Law.