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Research highlights key barriers preventing more consumers taking financial advice

14/10/2015

The perceived cost of financial advice is the main factor discouraging people from seeing an adviser and consumers have unrealistic expectations about the price they can expect to pay for advice, research from Old Mutual Wealth and Intrinsic has found*.

When asked to select factors that discouraged them from taking advice, 37% of those surveyed said that ‘the cost of getting advice’ was an issue that put them off seeing a financial adviser**.

Asked what they would be prepared to pay for advice, 44% said that they would not be prepared to pay a fee. A third (33%) said they were unsure and 15% said they would pay only up to £250.

The Government this week launched a consultation on consumer access to financial advice, with a special focus on helping those with ‘limited wealth.’

Published by the FCA and HM Treasury, the consultation paper says the Government will examine ‘areas where consumer demand is low because the long-term benefits of advice may not be fully appreciated’. It will also look at the reasons why advice is sometimes ‘perceived to be poor value for money…even if such advice could be of real benefit.’

According to the data collected through YouGov, the other significant barriers discouraging people from taking advice are:

  • One-third (33%) said they did not believe they had enough wealth for an adviser to help them.
  • 31% feared ‘paying for something they didn’t need’.
  • 30% said they believed advisers may be biased toward some products
  • 19% were unsure which advisers to trust
  • 15% weren’t convinced an adviser could offer value
  • 16% said they thought it was hard to know which adviser would give them what they need

Only 1 in 5 (20%) said they saw no barriers preventing them from speaking to an adviser.

Intrinsic chief executive Richard Freeman says

“The data shows we face a challenge demonstrating the value of advice to consumers. It is important for Government and the financial adviser community to work closely together to ensure more people can access the benefits of professional financial advice.

“Advice allows people to plan a sustainable retirement income strategy and protect their family if they become unwell or unable to support them. To many people, paying for advice can feel like a fee to shelter themselves from tomorrow’s problems. As a result, some put-off taking advice or choose not to take it altogether.

“The Financial Advice Market Review is an opportunity to address misconceptions and help people access the advice they need. If successful, there is an opportunity to make UK households more financially secure and more prosperous by doing so.”

*Data collected by YouGov in July 2015 from 1400 UK adults age over 35.

**Participants asked to respond to the following question: ‘What, if anything, discourages you from seeing an adviser?’

For more Information please contact:

Michael Glenister on 0207 7789 638 or 07469 144 535

Or

Tim Skelton-Smith on 02380 916998 or 07824 145076

Notes to editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £116.5 billion in customer investments (as at 30 June 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Quilter Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

The Quilter plc businesses are being re-branded to Quilter over a period of approximately two years:

• The Multi-asset business is now Quilter Investors

• Intrinsic to Quilter Financial Planning

• The private client advisers business is now Quilter Private Client Advisers

• The UK Platform to Quilter Wealth Solutions

• The International business to Quilter International

• The Heritage life assurance business to Quilter Life Assurance

• Quilter Cheviot will retain its name

This press release is for journalists only and should not be relied upon by financial advisers or customers.

Please remember that past performance is not a guide to future performance. The value of investments and the income from them can go down as well as up and investors may not get back any of the amount originally invested. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication is issued by Quilter plc.  Registered office: Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ, United Kingdom. Registered number: 6404270.  Registered in England.