CompaniesJan 28 2016

Third of investors want one-off advice: BlackRock

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Third of investors want one-off advice: BlackRock

More than a third of mass affluent Brits only seek financial advice for one-off events, according to a BlackRock report.

The BlackRock Investor Pulse survey, which questioned 4,000 mass-affluent individuals in the UK between July and September, found a third had previously sought advice but were not currently using a financial adviser.

BlackRock defined mass affluent investors as those who have either £100,000 personal income, £150,000 household income, or £100,000 investable assets.

There was an even split between those who currently use an adviser, those who had never used an financial adviser, and those who used a financial adviser in the past.

Jeremy Roberts, head of UK retail sales, said: “For me, the opportunity for advisers is to target those who have used a financial adviser at some point in the past.

“Advisers in the UK need to demonstrate the value of more holistic financial advice on a longer-term basis, and to help mass affluent investors in their future planning.

“These people clearly see the value of advice but potentially have just used it for a one-off event, such as taking out a mortgage or having a pot of money bequeathed to them.”

The survey found those who took advice only had 30 per cent of their wealth in cash, compared with those without an adviser who on average had nearly half of their wealth in cash.

Mr Roberts compared the growth of a £1,000 investment over the past 10 years, and pointed out the fund dropped to £998 if invested in cash and increased to £1,821 if exposed to equities.

Investors aged between 25 and 34-years-old, known as the millenials, also drastically underestimated the pension pot they would need to reach their goal in retirement by an average of £28,000 a year.

Despite mass-affluent millenials taking more financial advice compared to other age groups, the survey found these are most likely to be talking to bank advisers.

Mr Roberts said: “People don’t like uncertainty, and with changes to regulation and pensions and market volitily, that surely is the opportunity for advisers to help more customers through the journey of financial planning.”

He also cited technology as an important factor in helping advisers reach out to clients, adding that BlackRock is planning to launch more digital tools - similar to the Cost of Retirement Index - later this year.

Claire Walsh, chartered financial planner at Bright-based Aspect 8, agreed with Mr Roberts.

“While we would of course always encourage people to seek advice, not everyone wants advice and we are never going to convince everyone of the benefits.”

She pointed to research carried out by Unbiased.co.uk last year which looked at the barriers stopping people from taking advice, which included cost and location.

“I agree that the biggest opportunity is for people who are open to advice and if someone has previously sought advice then that would indicate that they are open to it.

“The challenge is that some of those people who have sought advice in the past may have had a bad experience – clients often tell me about bad experiences with endowments or the focus on selling products rather than providing advice.

“As an industry we have came so far but repositioning financial advice as a trusted position is going to take time.”

katherine.denham@ft.com