New FCA research shows a significant upswing in the number of people seeking financial advice on retirement planning.
According to the 2018 Financial Advice Market Review, 4.5m sought financial advice on pensions investment or retirement options over the last 12 months. This equates to around one in 10 people.
This is a significant increase on the 3.2m who sought advice the year before.
However the research found that the type of people seeking advice had not changed: men were more likely to have had advice them women, while the propensity to take advice increases markedly with age, wealth and education levels.
FAMR was a joint FCA and Treasury initiative, designed to encourage wider provision of affordable, high-quality financial advice and guidance.
The FCA says it wants this to be provided through a range of channels, including the workplace. But this latest survey does not provide figures for how many of these individuals received advice through their employer.
However despite more people seeking advice, the FCA says it believes there are still some 18.2m people who have savings or investment of more than £10,000 who have not sought advice.
Aside from regulated advice, this report found that almost half of all those surveyed (48 per cent) many sought information or guidance to help them with pension or investment decisions.
The most popular source of information was private money advice websites (24 per cent), then literature or online information from providers such as banks, insurers or pension companies. These were cited by 22 per cent of respondents.
A further 16 per cent said they accessed information from the media. In contrast just 4 per cent of adults surveyed said they had used The Pensions Advice Service in the past 12 month; 3 per cent had used Pension Wise while 15 per cent had used other government or consumer websites – such as Money Advice Service, Citizens Advice or Gov.uk.
Those who did pay for regulated financial advice were generally happy with the quality of service received.
The FCA found that cost was not generally cited as a barrier for those who had not sought financial advice, but many in this group were concerned whether this represented value for money.
The FCA adds that the market is starting to look at the feasibility of low-cost automated online advice service. It states: “It is possible [these services] could expand the total number of people accessing regulated financial advice.”
Steven Cameron, Pensions Director at Aegon says: “Today more than ever, individuals are left to take personal responsibility for their financial futures so it’s encouraging to see a greater number seeking the valuable support of professional financial advisers.
“While millions are benefitting from being auto enrolled into ‘defined contribution’ workplace schemes, these leave the individual with important decisions to make on how much to pay in, where to invest and how to draw an income in retirement.
“These are important decisions and while the sharp increase in numbers taking advice is encouraging, the FCA has also pointed to a further 18m people who haven’t taken advice but who might benefit from doing so. The financial services industry needs to continue to focus on ensuring individuals have access to the support and financial advice they need throughout their lives.”
