Over a fifth or 23 per cent say they will not be swayed to get financial advice no matter the circumstances, even assuming the advice was free, according to research from Canada Life.
Canada Life and financial consultancy AKG have joined forces to release the ‘State of Flux’ report, examining key factors influencing the current financial advice market and anticipating potential challenges and opportunities for the industry’s future.
The report’s findings indicate that only 45 per cent of UK adults have consulted a financial adviser. Among those not seeking advice, 21 per cent feel their wealth doesn’t justify it. Other deterrents include distrust of financial advisers, accounting for 11 per cent, and fear of pushy sales techniques, at 9 per cent.
On the other hand, individuals with ongoing adviser relationships highly value the human connection, citing factors such as understanding their financial situation at 19 per cent, peace of mind at 19 per cent, and confidence in advisers’ regulatory status at 18 per cent.
According to the survey, 12 per cent of consumers regret not speaking with a financial advisor in the past. The top three regrets include not having enough money saved for retirement at 35 per cent, not realizing how much inflation will affect at 31 per cent, and suffering financial losses at 27 per cent.
According to the research, those who do not seek financial advice frequently have unfavorable opinions about the sector. As one advisor put it, “Advice needs a stronger brand.”
The research emphasises the need for improved communication with current clients, even while it is imperative to convey the advantages of guidance to prospective clients. “Increased communication and updates” was ranked as the most important requirement for future adviser relationships by respondents who had spoken with an adviser in the previous five years at 23 per cent.
According to advisers’ observations, some businesses may not be able to afford to spend in marketing and communications, as the top concern for continuing operations was “marketing costs and issues attracting new clients” rated at 40 per cent.
Canada Life managing director, retirement Tom Evans says: “Closing the advice gap is clearly not a straightforward issue. In fact, we should be honest with ourselves and recognise there will always be an advice gap borne from people’s lack of willingness to engage, and advisers’ capacity to service. But that shouldn’t mean as an industry we don’t try to do a better job of communicating and marketing both the benefits and value of financial advice.
“Clearly trust or a lack of it, is still a factor that continues to plague the advice market. The fact that one in five people would not see an adviser even if it was free, is quite shocking.
“Why would a customer seek mortgage advice but be confident enough to choose the right path to retirement without advice? We need to be bold and challenge the current status quo, while also recognising that to serve a wider customer group, we need to embrace technology alongside attracting more advisers into the profession.
“The hope is that research such as ‘State of Flux’ will encourage the industry to have open discussions around challenges such as these, and ultimately keep driving the conversation forward.”
