More than one in four (28%) of those approaching retirement say they’ve used a financial adviser or wealth manager in the past or do so currently, new research from behavioural finance experts Oxford Risk shows.
But the study shows many are failing to make the best use of advice. Around 41% admit they rarely, if ever, review their financial retirement financial plans either with or without the support of a financial adviser.
It found that 14% review their financial plans more than once every six months, and another 14% review it once every six months. Around a quarter (26%) review it once a year and 5% say they review it once every two years.
The research was conducted by independent research company Viewsbank among 1,011 UK adults aged 55-plus between April 19th and 22nd 2024
The findings also revealed that those who do regularly review their retirement plans have a better understanding of how much they have saved and how to turn it into an income. Nearly three out of four (73%) who review their savings at least once every six months have clarity on their savings options.
Of those who review less frequently than once a year, just 26% feel like they have clarity, and 44% of respondents who rarely, if ever review, have no clarity on their savings options for retirement.
When asked if they’d prefer to leave behind a financial legacy for friends or family, or maximise their income during retirement, around two thirds (62%) surveyed said they’d prefer to maximise their income during retirement. Of these, 32% said they’d definitely prefer to do this.
In comparison, less than one in five (18%) said they’d prefer to leave behind a financial legacy for friends or family, and of these just 8% said that they would definitely prefer to do this. Around a fifth (20%) were undecided about what they would prefer to do.
Dr Greg B Davies, head of behavioural finance at Oxford Risk said: “Our research reveals that many over-55s nearing retirement are proactively seeking financial advice to optimise their investments. Those who regularly review their retirement plans are not only more informed about their savings but also better equipped to convert them into income that meets their goals.
“In today’s complex retirement landscape, particularly since the introduction of Pension Freedoms in 2015, personalised financial advice is essential. We’re witnessing a surge in demand for tailored guidance, prompting advisers to embrace innovative technologies that enhance client outcomes. At Oxford Risk, we’ve developed solutions that tackle these complexities and regulatory challenges head-on, empowering clients to maximise their assets with confidence.”
Guides available on Oxford Risk’s website for financial advisers and wealth managers outline how using technology and behavioural science enables firms to tailor services more efficiently whilst communicating with clients more effectively.
The firm emphasises that individual measures of risk tolerance, risk capacity, knowledge and experience, and sustainability preferences need to be combined into a holistic suitable risk level that also accounts for an investor’s specific behaviours. Measuring each component in isolation risks missing the overall intention to produce better outcomes for investors throughout their investment journey.
The company, which builds software to help wealth managers and other financial services companies assist their clients in making the best financial decisions in the face of complexity, uncertainty, and behavioural biases, has developed proprietary algorithms which rank products, communications, and interventions for their suitability for each client at a particular time.
