Young people are increasingly “less concerned” about the price of regulated financial advice, research has found
Research published by OpenMoney last week (November 5) found just 11 per cent of 18 to 24-year-olds thought cost was an issue, compared with 25 per cent last year.
The firm had polled more than 2,000 UK adults who had not paid for financial advice in the last two years, and found for 17 per cent financial advice would have to cost less for them to pay for it.
Despite assumptions young people might be the most price-sensitive when it comes to financial advice, these concerns had more than halved amongst this age group between 2020 and 2021.
Young people who were not concerned with price cited other factors which would change their mind on whether or not to pay for financial advice, including a need to be convinced it would save them money, and the need to be able to trust the advice.
“The fact that young people in particular have become less concerned about the price of advice bodes well for the future,” said Anthony Morrow, OpenMoney’s co-founder.
“It suggests there is a growing awareness among 18 to 24-year-olds that good quality, regulated advice is worth taking, possibly because sadly that age group has been worst affected financially by the pandemic and is now most in need of help.”
Reflecting these findings onto Britain's population, the financial advice firm calculated 6m people (up from 5.3m last year) wanted advice but thought it costs too much.
But a larger reason for not taking paid for financial advice was not knowing it existed. This year, almost a quarter (24 per cent) of the adults polled said they did not know this kind of advice existed.
For those who had paid for regulated advice in the past two years, 43 per cent said they paid for the value of service their adviser provided.
Other reasons were understanding the complexity of their finances, peace of mind, and a lack of confidence to manage their finances themselves.
However, uptake of professional advice has fallen in the past year.
OpenMoney found 7 per cent of respondents had paid for advice in the past year, compared with 10 per cent in 2020.
“It’s disappointing that so little has improved since the advice gaps were first identified by Citizens Advice in 2015," said Morrow, pointing to the annual advice gap report's former owner.
He added: "This is the third year OpenMoney has run this research and despite all the talk in that time about financial education, levelling up, combatting scams and protecting people from financial harm, actual positive action has been incredibly slow.
“Worse still, the investment market is becoming more and more dangerous, especially for inexperienced investors. Yet due to the inaccessibility of advice, people are left to fend for themselves in a world of crypto, high-frequency trading and high-risk products. It’s time for a change."