Thousands of people are ignoring professional advice, despite not having the necessary financial knowledge themselves, research by True Potential has found.
David Harrison, managing partner of the Tyne and Wear-headquartered firm, said that though April’s pension reforms gave savers unfettered access to their retirement funds, leading to a surge in people seeking financial advice, few are acting on it.
In a poll of more than 2,000 pension savers, True Potential found that almost 50 per cent of adults admitted they had ignored the financial advice they were given.
Yet when asked to rate their own understanding of financial affairs, less than 20 per cent of people claimed to have a “good grasp”.
Mr Harrison said: “No one expects consumers to be experts in financial services. That’s the role of the adviser, so it is alarming to see such high proportions of people opting to ignore the advice they are given.”
He added that the firm fully supported the government’s Financial Advice Market Review.
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Martin Upton, director of the True Potential Centre for the Public Understanding of Finance at the Open University Business School, said: “The feedback from those studying the centre’s online course Managing My Investments, suggests that many investors do not adequately understand the risk and return features of alternative products. Therefore they may lack confidence when it comes to deciding between the choices set out by advisers.”
