Some disturbing news from the latest research from My Pensions Expert about the perception of financial advisers. Apparently the survey found that:
- 57% did not trust financial advisors.
- 13% thought they had lost money by following adviser recommendations in the past.
- Many of these were through the Bank mis selling schemes of the past.
- 75% thought that the cost of financial advice was too high.
- The same people also thought that there wasn’t enough transparency around adviser charges.
- 65% of people preferred to use free online services than paid for advisers.
- 75% of people thought that they were best placed to make their own financial decisions.
These figures have caused some concern across the advice industry about how “we” can improve, but that is challenging given that “financial advice” covers such a wide area from big Banks to smaller individual advice firms.
Sometimes it can be helpful to reverse the numbers and look at the positives:
- 43% of people do “trust” financial advisers.
- 87% of people have not lost money in dealings with their financial advisors.
- 1 in 4 people thought that adviser charges were reasonable.
Of course, it can be confusing to just look at survey responses for guidance because it’s often conflicting. Take the reported 65% of people saying that they preferred to use free online solutions rather than paid for advice. That paints a somewhat different picture to the latest research from Just Group, which showed that 45% of respondents said that the government’s Pension Wise service was performing “quite terribly” with another 22% saying it was performing “terribly” – that’s 67% in total?
The government has pumped millions into advertising the Pension Wise service as a default for everyone reaching retirement age, but only 14% of retirees have accessed the service. It seems that the government has written off the service as its now announced that intends to re-brand Pension Wise, along with Money Advice Service and The Pension Advisory Service into a new single site service called Money Helper which will launch later this year.
Watch this space for more details.
More research from Aviva may shed some more light on the recent reports that advisers weren’t trusted by many people.
It seems that 45% of over 2,000 people surveyed said they were financially confident, but when they were asked a few relevant questions about retirement ages and tax relief etc they didn’t know the answers. With only 28% knowing what their state retirement age was. 70% of those questioned said they would always save in cash because it was safer, but as the survey pointed out £10,000 invested in cash in 2008 would have been worth £11,720 by 2018 but could have been worth £21,905 if it had been invested in the FTSE 100.
Interestingly, only 16% thought that having adviser would make them better off whereas 69% with an adviser knew that they were off because of the advice.