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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:

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

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy 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; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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