Recent research by the pensions and insurance company Aegon has revealed that the number of people seeking financial advice in the UK has increased by 25% since 2016, which is encouraging news because it means that more and more people are taking control of their financial futures without relying upon their own instincts or the whims of fate. However, since that still only breaks down to 1-in-10 people across the country who currently speak to a financial advisor about their finances, there’s still a lot of work to be done.
Of the remainder, the survey tells us that 47% continue to make financial decisions on their own and 40% make financial decisions with their partner or spouse. Aegon’s Pension Director Steven Cameron had this to say about the survey’s findings:
“The increase in the number of people speaking to a financial adviser is encouraging… however, overall take-up on financial advice remains worryingly low. Since last year, the numbers accessing their pensions flexibly through pension freedoms has continued to grow. Making the right decision on your retirement finances is hugely important and really should be done only with the help of a professional adviser. Worryingly, 32% of those going into income drawdown [FCA Data Bulletin, March 2018] did not use an advisor.”
So, when there is so much to gain from seeking a Financial Advisor’s help, why aren’t more people doing it? A recent article in The Telegraph probably offers the biggest clue:
I can’t afford it
The perceived cost of financial advice is a big obstacle, with many potential customers believing that what a financial advisor charges isn’t worth what they could potentially gain. However, what they don’t stop to consider is that seeking the correct financial advice could make them a lot more money in the long-term. A February 2018 study by the stockbroker Numis revealed that people who take financial advice are more likely to increase their wealth than those who do not.
Financial advice is only for the very wealthy
Many people don’t seek financial advice because they don’t believe their assets or savings warrant that kind of attention. But the reality is that good financial advice could significantly increase their finances, simply by helping them make the correct well-informed changes.
I don’t like risk
For people who are on the outside looking in, taking financial advice can feel a little bit like playing the lottery. They don’t want to put their hard-earned savings at risk by investing in the stock market and they are understandably wary of a complex world they don’t understand. Also, let’s factor in the sad but undeniable fact that many people simply don’t trust financial advisors – like any other industry, the finance advice market has had its fair share of scandal and discontent. But it’s important to remember that there are plenty of reputable advisors out there, and there are a tremendous range of investment opportunities available, many of which would suit even the most risk-averse personality.
The bottom line
The International Longevity Centre conducted a 2017 study in which people were divided into two categories – the ‘affluent’ and the ‘getting by’. The study found that the ‘affluent’ who took financial advice accumulated an average of £12k more in liquid financial assets than those who didn’t, and almost £31k more in pension savings. In the ‘getting by’ group, those who took advice saved an average of £14k in liquid financial assets and almost £26k more in pension wealth.
At Moyes, we have a reputation for honesty and transparency. Unlike many IFA’s who only follow an industry standard review, we monitor our clients funds on a monthly basis via our Investment Committee meetings and also conduct quarterly reviews which are emailed to all our clients. And we don’t only actively monitor our clients’ funds, we have the discretionary powers to move swiftly on behalf of our clients if circumstances change in the market place. Only 3% of IFA’s currently have discretionary powers, which means we’re in the very top tier of financial advisors in the country.
If you’re among the 9-in-10 who are feeling indecisive about seeking financial advice, or if you’re one of the 1-in-10 who are taking financial advice but might still be wondering if your advisor is giving you the service you deserve, contact us today to explore your options. Our friendly team are always here to help on 01638 429975 or [email protected]