Younger consumers flocked to financial advice during the uncertainty of the coronavirus crisis when compared with their older counterparts, according to research from behavioural finance experts.
Data released by Oxford Risk found 16 per cent of consumers aged between 18 and 34 with stock market investments and savings sought more financial advice during the pandemic than they usually would have, compared with just 6 per cent of wider investors.
The research also found 38 per cent of investors in the younger category had not taken any professional advice during the crisis, compared with 60 per cent of all investors.
Greg Davies, head of behavioural finance at Oxford Risk, said: "It is encouraging to see from our research that many investors – especially younger ones – turned to professional advisers to help guide them the market turmoil during the early stages of the coronavirus crisis."
But Mr Davies warned the systems used by some wealth managers to support clients were "too human heavy, inefficient, and front-loaded to the beginning of the client relationship".
He added: "How wealth managers and IFAs understand the financial personality of clients is often limited to poor risk profiling, which is subjective to human assessment.
"They need to focus more on objective, science-based measures to provide a comprehensive picture of their clients. There is too much guesswork and not enough technology."
A survey of more than 2,000 consumers published by advice firm Progeny last month found 41 per cent of people with an adviser sat in the 18-34 age group.
Progeny said the results of their research gave reason to be optimistic and showed the younger generation "got it", although concerns remained over a persisting advice gap amid ongoing uncertainty surrounding cost.
Laura Ripley, chartered financial planner at Handford Aitkenhead & Walker, said the increased volatility in markets presented a new challenge for young investors.
Ms Ripley said: "Many may not remember the global financial crisis so undoubtedly this will have been a factor in the increased figures of those seeking advice.
"I really hope their experience of the advice they’ve taken has been enough to reassure them about the industry and encourage them to build a long term relationship with an adviser.
"Online research facilities make it simple for investors, of any age, to do their own basic research but it’s a full time job to keep on top of the investment solution and I think the direct-to-consumer platforms are sometimes guilty of oversimplifying the process in their presentation of the data."
rachel.mortimer@ft.com
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