Just over half of UK adults (51%) would consider turning to a financial adviser to help with their money management, research by Hargreaves Lansdown has found.
The poll of 2,000 people also revealed that 29% would not take advice because it was too expensive, rising to 33% for women and 37% to those aged 25-54.
Another 28% believed they didn’t have enough money to make financial advice worthwhile – among this cohort 35% were women and 34% aged 55 and over.
But Sarah Coles, personal finance analyst at Hargreaves Lansdown, said that if the Financial Conduct Authority’s own data is taken into consideration the picture is definitely bleaker.
According to the regulator, just around 6% of adults in the UK seek financial advice – a big drop from the 51% in the investment platform’s research.
“When financial advice doesn’t add up, savers and investors need a sensible alternative,” Coles said. “Part of the solution is to ensure that those who would benefit from advice overcome the commonly held misunderstandings holding them back. This includes the 21% who don’t trust advisers and the 12% who simply believe that advice isn’t for people like them.
“Then there’s the one in 20 who are put off because they don’t want to sign up for ongoing advice and services they don’t want or can’t afford – without realizing that some businesses offer one-off sessions covering whatever is most important to you.”
But Coles added that there are “millions of people” who would actually appreciate someone to help them manage their finances better but don’t have enough money to pay for advice, as they don’t want their savings and investments diminished by fees.
While there are some firms that are “keen” to fill this gap – with technological solutions at the forefront – there are limitations on what they can actually do under the current rules, Coles said.
“If the guidance is too helpful and too tailored to people’s needs, it could be considered to be overstepping the boundary into advice, because it becomes an implied recommendation,” she added. “So, for example, if someone has invested in a high-cost index tracking fund, you can’t highlight specific cheaper alternatives, even if they are like-for-like, which is a barrier to investors taking action in their best interests.
“It’s why Hargreaves Lansdown is campaigning for a change in the rules around guidance, to allow regulated companies to give people simple, more personalised financial advice and Wealth Management to help them improve their financial position.”