The UK government has been preaching to the masses to get a grip of their finances, however a study shows a third of them do not know where to get help.
IFA network Openwork surveyed just over 1,000 UK adults and found 33% are uncertain about where to access financial advice.
Women (35%) were found to be slightly more unsure than men (30%), while over half (51%) of people aged 18–24-years old do not know where to get advice.
Regulation taken market in wrong direction
“The advice gap in the UK is something that cannot continue to be ignored from a public interest perspective,” Keith Richards, chief executive of the Personal Finance Society, told International Adviser.
“We have seen the advice gap in the UK continue to grow over the past 20 years and this is, regrettably, set to continue as further regulatory change continues to impact both the market and consumers in the wrong direction.”
Mike Morrow, wealth and platform director at Openwork, said: “Despite the growing demand for expert financial advice; it is worrying to think that, as we enter a new decade, so many people don’t know where to access financial advice.
“There are many helpful online tools such as The Pension Advisory Service, The Money Advice Service and Unbiased.co.uk, however, much more needs to be done by the industry and the government to help people access the financial advice they both need and deserve.”
Tech shift not helping
The Openwork survey found that, despite a growing shift towards increased use of technology, the overwhelming majority of adults (75%) would prefer face-to-face interaction with a financial adviser.
Some 67% said robo-advice might not be entirely appropriate for their specific needs, with both 18 – 24-year olds (71%) and 55 – 64-year olds (73%) saying that they are unsure about its benefits.
Recently, consumer champion Which found 3,312 bank and building society branches closed their doors between January 2015 and August 2019, with an average of 55 closures a month, which is squeezing the access to advice.
Richards added: “The withdrawal of advice for the mass-market by the banking sector is where the biggest impact has been felt.
“Indeed, as intermediaries were expected to increase their focus on higher value clients, it was anticipated that the banks would help to bridge the social exclusion gap by building capacity through their branch networks, but bank adviser numbers have reduced.
“The increasing use of technology will naturally play its part in bridging access to products and services, but the need for professionally qualified advice has never been greater and, therefore, in the public interest to seek a solution to the advice gap.”
Proactive approach
Openwork’s research shows a real need for financial advice, as 27% of people said they don’t know if they are meeting their targets for retirement saving.
David Inglesfield, chief executive at newly formed IFA firm Independent Wealth Planners, told IA: “There are about 5,000 independent financial advisory firms in the UK – but it’s striking that so many people don’t know how to get good advice. And some large national firms only offer restricted advice on their own products.
“IWP is a business which brings together local IFA firms to give them access to national resources. Later this year, we’ll be launching IWP as a national brand signposting the way to independent local advice.
“We are currently working with over 30 of the country’s best local independent firms, who are considering joining IWP. Together, we hope to secure the future of independent financial advice and make it easier for people to access the advice they need.
“Managing your long-term finances is a big responsibility and it’s very important that everyone can access advice they can trust.”
