At least 1.3m people claim they were mis-sold a pension or investment product by a financial adviser, according to new research by the Financial Conduct Authority.
This means 13 per cent of those who received regulated advice in the past year have, recently or in the past, been mis‑sold a product.
Similarly, 13 per cent believe they have received bad advice unrelated to mis‑selling, recently or in the past. This equates, in each case, to 1 per cent of all UK adults.
Of those who have not received advice in the past year, 16 per cent believe they have been mis‑sold an investment or pension product, and 21 per cent believe they have received bad advice unrelated to mis‑selling.
The figures were published this morning in the FCA's Financial Lives Survey 2017, which surveyed 13,000 people to build up a picture of their experiences with the financial services sector.
One of the issues the survey highlighted was how much people are willing to pay for financial advice.
Around three in 10 - 28 per cent - said advice would represent good value for money only if it was offered at £100 or less and a further 10 per cent said advice would be good value for money at a price point of £250.
Both of these figures are significantly lower than than amounts typically charged by advisers.
Recent figures from adviser directory Unbiased show investors should typically expect to pay £500 for an initial financial review and after that an hourly charge of £150. It estimates that at-retirement on advice on a £100,000 pension pot would cost around £2,000.
Just 8 per cent would see advice as good value for money at a price point of £500 or more, according to the FCA's research.
Another finding was that many young people felt they simply did not need an adviser at all.
It found 21 per cent of those aged 18 to 24 felt they knew enough about investments to choose ones which were suitable for them without consulting a financial adviser, compared to 29 per cent for all UK adults.
Meanwhile 19 per cent of those aged between 18 and 24 felt they knew enough about pensions not to need advice, compared to 27 per cent of the UK population.
In this morning's (18 October) report the FCA said these claims may demonstrate "some naivety" due to the lack of experience younger people have with these products.
Over half (56 per cent) of those aged 18 to 24 who think they can find a pension themselves do not have a pension, and the vast majority of the rest have a defined contribution pension organised by their employer.
The survey also found that three in 10 people aged between 55 and 64 - or 28 per cent - did not know where to look for a financial adviser compared to 34 per cent of all UK adults.
One in 10 of those people aged 55‑64, or 800,000 people, have received regulated financial advice related to investments, saving into a pension or retirement planning in the last 12 months.
This was the second highest rate of any age group after 65 to 74 year olds at 13 per cent.
One in five 55 to 64 year olds think financial advice is only suitable for those with a large amount of money to invest, which is not materially different to how all UK adults feel.
When asked to consider the attractiveness of investment advice at specific price points, just over half - 53 per cent - of 55‑64 year olds who have not had advice but might have a need for it would not pay for advice from a regulated financial adviser at any price.
More widely, the survey found that 50 per cent of UK adults display one or more characteristics which could make them potentially vulnerable.
These include renting, being unbanked, having no qualifications, no investable assets, and not being in a couple.
Christopher Woolard, the FCA’s executive director of strategy and competition, said: “One of the things we are looking for here is information about potential harm.
“Where are the potential risks in terms of the duties we are charged with?
“50 per cent of any age group could have one or more vulnerable characteristics but the fact you have those characteristics does not mean they will suffer harm.
“These consumers need to be thought of much more carefully.”
The FCA has also identified 4.1m consumers who are “in difficulty”, meaning they have failed to pay domestic bills or meet credit commitments in three or more of the past six months.
The FCA found 10 per cent of the UK population would struggle if their monthly mortgage or rent payments went up by £50 a month or more.
The Bank of England is widely predicted to increase interest rates from their historic low of 0.25 per cent early next month.
The survey also found 15m people do not have a pension, despite the auto-enrolment reforms.
damian.fantato@ft.com
