Only around half of people or 51 per cent say they would consider taking financial advice, according to Hargreaves Lansdown.
According to data from an Opinium study of 2,000 people conducted for HL in April 2022, 29 per cent of people indicated they wouldn’t take advice because it was too pricey. This increased to a third among women or 33 per cent, and 37 per cent among individuals aged 25 to 54.
Another 28 per cent claimed they lacked the financial means to make it worthwhile. Nearly 35 per cent of women and 34 per cent of those aged 55 and up were included in this group.
Hargreaves Lansdown personal finance analyst Sarah Coles says: “When financial advice doesn’t add up, savers and investors need a sensible alternative. In theory, half of us think we might consider taking advice, but in reality the FCA says that the number of people who actually end up getting help is far lower – at around 6 per cent of adults.
“Part of the solution is to ensure that those who would benefit from advice overcome the commonly held misunderstandings holding them back. This includes the 21 per cent who don’t trust advisers and the 12 per cent who simply believe that advice isn’t for people like them. Then there’s the one in 20 who are put off because they don’t want to sign up for ongoing advice and services they don’t want or can’t afford – without realising that some businesses offer one-off sessions covering whatever is most important to you.
“However, there are also millions of people who would love to get a steer on how to manage their money better, but don’t have enough cash to make paying for advice worthwhile. When you’re starting out with savings and investments, you may not have a huge amount of money to put aside, but you want some help to get onto the right path. Likewise, cost can be a barrier for those who are worried that they need every penny of their savings and investments to protect themselves, and don’t want to eat into it with professional fees.
“Financial companies are keen to step into the breach, and there are all kinds of solutions in the pipeline, using the best of technology alongside the intervention of experts.
“However, right now there are real limits on what they can do under current rules, because if the guidance is too helpful and too tailored to people’s needs, it could be considered to be overstepping the boundary into advice, because it becomes an implied recommendation. So, for example, if someone has invested in a high-cost index tracking fund, you can’t highlight specific cheaper alternatives, even if they are like-for-like, which is a barrier to investors taking action in their best interests.
“It’s why HL is campaigning for a change in the rules around guidance, to allow regulated companies to give people simple, more personalised, guidance and nudges to help them improve their financial position.”