The advice industry is unlikely to close the advice gap, as research reveals that more than a fifth of people would not seek advice even if it was free.
A new report by Canada Life, in partnership with consultancy group AKG, found that less than half (45%) of UK adults have ever seen a financial adviser and 23% said they will not be swayed to seek advice even if it was offered free.
A lack of wealth was cited as the leading reason (21%) for not seeking advice, while 11% admitted they do not trust financial advisers and 9% are afraid of ‘pushy sales techniques.’
However, just over one in 10 (12%) said they regret not seeing an adviser in the past, with concerns about not having enough money to fund retirement cited by more than a third (35%). Underestimating the impact of inflation (31%) and losing money (27%) were also key reasons for their regret.
In contrast, consumers who do see an adviser said they were driven by a desire to access someone human who understands the financial situation (19%), peace of mind over financial decisions (19%) and knowledge that advisers are regulated (18%).
Tom Evans, managing director, retirement at Canada Life, 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. 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 report also highlighted the need for advisers to improve their communication with their existing client base. Those who have spoken to an adviser in the past five years were asked in what ways they think their adviser relationship will need to adapt or change in the future. The top reason selected was “increased communication and updates, involving more regular check-ins, performance reviews and adjustments as circumstances change”.
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