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Increase in people seeking advice but still ‘worryingly low’

30 May 2018

The number of people seeking financial advice is on the increase, but overall numbers continue to remain worryingly low, says Aegon.

A recent survey by the pension provider found that 10% of people currently consult a financial adviser about their finances, up 25% on the previous survey.

However, the majority (47%) reported making financial decisions on their own, while 40% said they made decisions with their partner or spouse.

Steven Cameron, pension director at Aegon, described the increase in people speaking to a financial adviser as “encouraging” but warned that the overall take-up of financial advice was “worryingly low” with only one in 10 seeking advice.

He said: “Since last year, the numbers accessing their pensions flexibly through pension freedoms continued to grow. Making the right decision on your retirement finances is hugely important and really should be done only with the help of a professional adviser. Worryingly, 32% of those going into income drawdown did not use an adviser.

“Both the regulator and the government are keen to make advice and guidance more accessible to more people, and their Financial Advice Market review led to a range of initiatives. However, while advisers support the aims of these measures, Aegon research shows they are sceptical these are making a difference in practice.”

Cameron said for those unsure of whether they need advice, free sources such as Pension Wise can help, while providers and some employers can offer basic information. However, for the more important or difficult decisions people should consider paying for advice.

Aegon cited nine reasons to speak to a financial adviser:
1. Selecting a pension product;
2. Planning retirement goals;
3. Checking you’re paying enough to meet retirement goals;
4. Deciding how to access your pension and how much income to take;
5. Consolidating your pension savings into one pot;
6. Transferring a pension to a different provider;
7. Considering whether to transfer out of a pension;
8. Reviewing investment performance,
9. Inheritance tax planning.

Cameron added: “In many cases the benefits of getting things right can far outweigh the costs. It might be money well spent to ensure they are doing the best they can for their financial futures.”

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