The majority of Brits do not trust financial advisers, according to a newly released piece of research.
The survey, from advice firm My Pension Expert, found that out of 2,000 respondents, 57 per cent did not trust financial advisers, but this rises to 65 per cent among those aged 55 and over.
More than one in four said that they had been pressured by an adviser into purchasing a financial product without fully understanding what it was, while 13 per cent had lost money having followed the recommendations of an adviser within the past year.
Three quarters of Britons also said independent financial advice was too expensive.
The results also revealed that 38 per cent of UK adults had sought independent financial advice at some point in their lives. In contrast, 65 per cent said they prefer to use free online advice services, while 76 per cent felt confident enough to make their own financial decisions.
My Pension Expert’s research also revealed an overwhelming majority (78 per cent) of people would be more inclined to seeks advice from IFAs if harsher punishments were introduced for advisers engaging in unethical practices.
A similar number (76 per cent) also called for greater transparency around how advisers calculate their fees.
Mark O’Neill, a chartered financial planner and director at True Bearing said the distrust rate was not overly concerning, and is to be expected within “most professions”.
“A few bad advisers or experiences can taint the sector, and obviously the subject of money and finances is so personal and emotive.
“I think this causes a stigma and the public can be 'once bitten' on a large scale, such as the recent British Steel scandal over defined benefit pension transfers.
“They also possess long memories and the banks haven’t helped in the past with forays into regulated financial advice such as HSBC and their subsidiary NHFA where investment bonds were mis-sold for care fees planning to vulnerable clients which is obviously particularly sensitive.
“I don’t think the media helps either - who are often too quick to sensationalise individual cases.
“Wouldn’t it be refreshing to read more success stories about the positive outcomes of financial planning which people could actually gain confidence from and benefit their own situations.”
Andrew Megson, executive chairman of My Pension Expert said: “The lack of trust in independent financial advisers is alarming – it is a wakeup call that the financial services industry cannot afford to ignore.
“Financial advice is not all smoke and mirrors. It genuinely helps people to make informed decisions about their financial strategies, from savings and investments to life goals and retirement.
"However, poor past experiences, heavy-handed sales tactics, complicated fee structures and unnecessary jargon are all making people turn their backs on IFAs.
“The industry must act to change public perception of financial advice. IFAs must be more transparent, use plain language and any untoward practices have to be punished.
"Otherwise, Britons will only become more reluctant to seek financial advice. And in the current economically volatile climate, this could prove disastrous for people finances.”
O’Neill added that financial advisers need to convey the value they add to the client: “It is important that we ensure clients understand that whilst ‘the price is what you pay, it is the value that you will receive.’ Cost should never be the sole driver in financial planning.
“IFAs can ensure that they are as highly qualified as possible, gain the relevant professional accreditations in the areas that they are practicing, and shout this message from the hilltops to their target markets."
