Advisers are under increasing pressure to prevent a growing ‘advice gap’, Unbiased and Metlife have said, although research shows that more than a third of advisers deal with small pension pots.
Research by Metlife and Unbiased showed that 37 per cent of advisers - from a sample of 166 IFAs - said that they do deal with small pension pots and likewise smaller income and mortgage amounts, so there are advisers satisfying the demand of consumers with smaller levels of wealth.
Around 61 per cent of women have never sought advice from and independent financial adviser or whole of market advisers, compared to 53 per cent of men.
Separate research, conducted by Opinium Research among 2,002 UK adults, revealed that the advice gap leaves more than half of UK adults unadvised.
Some 58 per cent of adults have never sought advice from an independent or whole or market adviser, leaving a total of 42 per cent that have.
Sebastian Hurst, an adviser at Plutus Wealth Management, said that the reason for the perceivable advice gap was that the older generation still view advisers as “those who are trying to earn a quick buck”.
He said that the push from the Retail Distribution Review for advisers to become more qualified and professional definitely resonates with the younger generation who are a bit more aware.
“I think the older generation still view us as sales people, still view us as people that are trying to earn commission and that’s the way it is.
“That’s what the history of the financial advising world has been up to a point, so I think their mindset is still anchored in that and I actually, when I do see some retirees I say ‘look I charge a fee, I don’t get commission’, seeing that upfront can put them off, but I think they are still anchored in terms of a misrepresentation of what we do and where we add value.”
The research showed that consumers rate mortgages (excluding first-time buyers) as top of the priority list for seeking financial advice, with 14 per cent of Brits, followed by life insurance at 13 per cent, retirement planning at 12 per cent and savings accounts (excluding independent savings accounts) at 11 per cent.
Karen Barrett, chief executive at Unbiased, said that generally the highest areas where people are seeking advice is around mortgages, life insurance and some areas of retirement planning, noting that this potentially mismatches the areas where advisers say they can help people with most.
“Overwhelmingly, people feel that they are confident in making their own decisions. It seems that wisdom does come with age, as 48 per cent of those 60 plus feel that they can make their own decisions and yet those in the younger age groups between 20-29, only about a fifth of people felt confident making their own decisions.
“If you look at the people who have said it is too expensive or prefer to use online resources, I think what we need to do is make sure that the responsibility of the decisions that they have made lie with them in this case, and that by going and seeking professional advice you can share that responsibility with a professional who understands the market and help you make the right choices.”