The perceived cost of financial advice is the key barrier preventing more consumers from seeing an adviser and consumers have unrealistic expectations about the price they can expect to pay for advice, a study conducted by Old Mutual Wealth and Intrinsic has found.
Nearly 37% of the people who participated in the survey said that ‘the cost of getting advice’ was major factors that put them off seeing a financial adviser.
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When 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.
Data, which was collected by YouGov in July 2015 from 1400 UK adults age over 35, suggested that one-third (33%) of the respondent did not believe they had enough wealth for an adviser to help them.
The other significant barriers discouraging people from taking advice are: 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; and 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, according to the survey report.
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By GlobalDataCommenting on the finding, Intrinsic chief executive Richard Freeman said: "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."
