Advisers are misjudging the advice gap and missing out on a large cohort of potential clients in what consumer finance website Boring Money calls the “lost generation” of “tired parents”.
A new white paper from ex-Platforum managing director Holly Mackay has suggested the group of 8.4 million UK adults aged 35 to 44-years-old is less engaged with financial services than any other.
It commissioned YouGov to conduct an online poll of 2,197 UK adults at the end of September.
Just 5 per cent of those aged 35 to 44 reported having a stocks and shares Isas, compared with 10 per cent of 25 to 34-year-olds.
Only 22 per cent have a private pension, again less than the 25 to 34-year-olds surveyed.
Exceedingly risk averse, Ms Mackay said there are signs of “reckless caution” among this group, as just 1 per cent of the “tired parents” have a stocks and shares Junior Isa, compared to 19 per cent who hold a cash Junior Isa.
At the same time, more than one in five has more than £5,000 sitting in a current account, earning little if any interest.
Boring Money stated there is a huge opportunity for the advice industry to reach out to this disengaged, yet web-savvy cohort who are turning their backs on private pensions, stocks and shares Isas and traditional advice models.
Its research reckoned this age group do not want to receive advice in the way advisers want to provide it.
When presented with various options around investing, 29 per cent preferred a solution that could be opened at home in less than 10 minutes; significantly higher than the national average.
Fewer than one in 10 “tired parents” found the offer of two hours of free financial advice - in an adviser’s office - appealing, while just 5 per cent wanted the model currently most commonly offered by advisers - a paid hour with a known-brand adviser.
Traditional face-to-face advice was also shunned.
Even after emphasising the financial losses which poor decision-making can lead to, 35 to 44 year-olds remain unconvinced about going to see an adviser, with 36 per cent still wanting to go it alone, online at home, compared to 31 per cent of 25 to 34 year-olds and just 20 per cent of 55 to 64 year-olds.
Of those who had recently bought a financial product, none of the “tired parents” had taken their recommendation from an adviser, yet 18 per cent were willing to take advice from friends and family.
Boring Money managing director Ms Mackay commented 35 to 44-year-olds feel particularly disengaged with their finances.
“They feel mistrustful of the industry and are concerned about where to turn for advice. Time and convenience is a new dimension the industry has been slow to address. Simple authentic language and ease of access will be key success factors for anyone trying to engage this group of customers.
“The current Financial Advice Markets Review is a clear opportunity for the industry, regulators and the government to think about how we can better serve this disaffected group.”