"The hope is that research such as ‘State of Flux’ will encourage the industry to have open discussions around challenges such as these, and ultimately keep driving the conversation forward."
- Tom Evans, Managing Director, Retirement, at Canada Life
Considering the major factors that shape the financial advice market, AKG’s report suggests that the advice gap could widen before there is any chance of it closing with less than half (45%) of adults in the UK having seen a financial adviser at any point. Of that figure, 23% said they would not be swayed to get financial advice no matter the circumstances – even if the advice was free.
Over one in five (21%) who aren’t engaged with advice, said they don’t have enough wealth to warrant seeking an adviser. This was followed by not trusting financial advisers (11%), and being afraid of pushy sales techniques (9%).
However, those who did seek an adviser on an ongoing basis said they attach a great deal of value to their relationship with 19% prioritising access to someone human who understands the financial situation, followed by peace of mind over financial decisions (19%), and the knowledge that advisers are regulated (18%).
12% of consumers said they regretted not seeking a financial adviser in the past, with 35% worrying they now don’t have enough money to fund retirement, 31% underestimating the impact of inflation, and 27% losing money.
Although explaining the benefits of advice to new clientele has obvious value, the report found that there is a demand for more communication from advisers with their existing client base. Of those who had spoken to an adviser in the last five years, 23% said increased communication and updates, involving more regular check-ins, performance reviews, and adjustments as circumstances change would be vital moving forward.
40% of advisers agreed that marketing costs and issues with attracting new clients were causes for concern relating to ongoing operations.
Commenting on these findings, Tom Evans, Managing Director, Retirement, at Canada Life, has said:
“Closing the advice gap is clearly not a straightforward issue. In fact, we should be honest with ourselves and recognise there will always be an advice gap borne from people’s lack of willingness to engage, and advisers’ capacity to service.
“But that shouldn’t mean as an industry we don’t try to do a better job of communicating and marketing both the benefits and value of financial advice. Clearly trust or a lack of it, is still a factor that continues to plague the advice market. The fact that one in five people would not see an adviser even if it was free, is quite shocking.
“Why would a customer seek mortgage advice but be confident enough to choose the right path to retirement without advice? We need to be bold and challenge the current status quo, while also recognising that to serve a wider customer group, we need to embrace technology alongside attracting more advisers into the profession.
“The hope is that research such as State of Flux will encourage the industry to have open discussions around challenges such as these, and ultimately keep driving the conversation forward.”