A British survey has shown that in that country, a third of investors who had paid for advice in the past five years would not do so again.

Britain has new rules that mean financial advisers must declare their charges explicitly, rather than receiving commission from product providers.

Research firm GfK found one in three of the more than 60% of people who had used an investment adviser in the past would not now seek advice in future, opting instead for the DIY approach.

Matt Phillips, of Top Half Financial Services, said advisers needed to think about whether their clients perceived that they were getting value. “If they aren’t seeing value, why pay for it?”

He said commission and incentives could cloud advisers’ judgements but until everyone was forced to shift to fees from commissions, there was a fear that those who did would lose their business to those seen as offering advice “free”.

Institute of Financial Advisers president Nigel Tate said few people would have the knowledge or skill to manage their own investments.  “While the markets are as they are at present most people could make money, but what happens when we have the inevitable decline in the future, who do they feel would have the better position: A professional adviser that has covered all of his or her obligations in the New Zealand code, or themselves with no knowledge or skills in asset selection or management?”

He said many investment advisers were already forgoing commissions in favour of fees for clients. “There is a lot more done for the fees than simply sitting and watching the investment… New Zealanders are renowned for being great DIY-ers but from a financial perspective, I feel that so many were burned in the finance company collapses that they are now both more gun shy and far more aware of the value of good advice.”

PAA general manager Jenny Campbell said most people were comfortable with how advisers were paid and did not expect anyone to work for nothing.  “As long as it is really clear who is paying whom and how much, then this doesn’t seem to be much of an issue.”

But she said some people still took a DIY mentality to their financial planning. “Most of the money lost through dodgy finance companies post-GFC was actually through direct investments with those companies.”

She said showing people the value of good advice was the number one challenge for the industry. “We don’t hesitate to go to accountants or lawyers but are still reluctant or unsure what an adviser can offer.”