A large proportion (40 per cent) of adults who aren’t taking professional financial advice say it’s because they are confident they can already make the best financial decisions for themselves, according to new research* from unbiased.co.uk and MetLife.Although cost is often cited as a major factor that puts people off seeking advice, only 11 per cent said it was the main reason for them not seeking expert help with their finances.
The 2015 Value of Advice report found that a further 14 per cent of people don’t believe they are even suitable to receive advice, and six per cent are entirely relying on free online information instead. However, based on this research, using retirement planning as an example, people who receive professional financial advice could it is estimated, have had on average £48,279 more for their retirement than those who didn’t.**
Many of those who have never sought advice would consider doing so in the future, and say that certain incentives would make them more likely to do so. These include: being given a real cash figure that the advice would help them achieve (14 per cent), knowing the overall cost of advice up front (12 per cent), and being able to access some introductory information from advisers online first (10 per cent).
Advisers agree that that introductory sessions and information are essential for encouraging people to seek advice and take action. A large majority (88 per cent) of advisers*** believe the growth in basic guidance resources, particularly on retirement options, will see more people coming to professional advice for the next steps in their financial planning.
Simon Massey, Wealth Management Director at MetLife, comments:
‘Pension freedoms have given retirement savers more choices and flexibility but the increased freedom to cash in pension funds means an increased risk of running out of money in retirement. People will literally have to live with any mistakes they make. Certainty over income in retirement will be increasingly important now that savers have more choices and that should highlight the value of advice in retirement planning.’
Karen Barrett, chief executive of unbiased.co.uk, comments:
‘We think of confidence as a good thing, and generally it is. However, overconfidence can do more harm than good. People can and should feel empowered to make financial choices for themselves, but that empowerment should include knowing when to call on professional expertise. Life-changing sums of money may be at stake if people don’t make wise financial decisions, so those taking a DIY approach to these critical choices may well live to regret it.
‘A general sense of financial confidence is not at all the same as an in-depth knowledge and experience of financial products, allowances, regulations and “what if?” scenarios. A non-specialist can’t possibly be expected to keep on top of all that. Professional advisers make it their business to know these things and can tailor plans accordingly – and these plans provide people with true confidence that they are doing the very best they can with their money.’
For a free and confidential search for a whole-of-market financial adviser, visit www.unbiased.co.uk
ENDS
Notes to editors:
*unbiased.co.uk research conducted by Opinium Research between 27 February to 2 March 2015, among 2,002 nationally representative UK adults aged 18+.
**Based upon a pension pot of £100,000, MetLife has estimated the total increase as a result of saving an additional £71 per month from 40 to 65 years of age. This assumption accounts for a fund management charge of 0.5% per annum and contract management charges, tax relief of 20% and investment growth of 5% per annum. The assumption is based on a range of annuities, details of which can be found here.
***Adviser research conducted among 166 unbiased.co.uk advisers, March 2015
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Helping over one million visitors a year, unbiased.co.uk is the UK's No 1 adviser search, connecting consumers with the biggest and most versatile search for regulated and independent advisers. We match consumers and businesses to over 24,000 IFAs, financial advisers, mortgage brokers, solicitors and accountants. We make it easy to find the right advice by providing information, insights and tools to facilitate consumer choice.
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Category: Value of Advice Tagged: Personal finance
