Customers are benefitting from local Independent Financial Advice according to the latest research from the Financial Conduct Authority (FCA).
The FCA’s latest Financial Lives Survey was published earlier this year. The survey is now in its third year and is starting to build a picture of the UK’s attitude to a wide range of financial matters.
According to the 2022 survey results:
- 87% of people trust their Independent Financial Adviser
- 85% are confident about the advice they have been given
- 84% are satisfied.
That’s a positive endorsement from those surveyed who had used local Independent Financial Advice. It also seems that customers want to see their advisor face to face as well. According to research by Simplify Consulting via YouGov, they found that:
- 95% of customers preferred human interaction over an automated solution.
- 75% said that seeing their advisor at a convenient time was also very important.
- 66% said that they wanted communication by e mail and
- 61% still wanted to see the paperwork.
- 58% of under 35’s said that social media communication were important to them, but
- Only 12% of over 65’s thought so.
Sadly however, only 8% of people in the UK have actually used a financial adviser in 2022, although that is up from only 6% in 2021.
Of those people with over £100,000 to invest, one in three had used local Independent Financial Advice. So, the numbers using advisors increase with both wealth and age of course, as people near retirement.
The reverse is also true. Those with less money and younger people don’t benefit from financial adviser relationships and don’t have the same outlook with 45% of those with less than £10,000 to invest saying that they didn’t trust advisers. This is reflected in where people get their access to financial advice from. Hargreaves Lansdown recently found that:
- 21% of under 35’s get their financial information and retirement advice from Instagram
- 16% from Facebook and 8% from TikTok
- Of 35- to 55-year-olds 35% will go direct to an local Independent Financial Advice website for their information rather than social media
- Of the over 55’s unsurprisingly none used Instagram or TikTok to access financial advice!
With younger people the lack of over financial understanding is worse.
Research by Royal London of 18 to 24 years found some shocking details:
- Only 28% knew that their pension contributions were invested.
- 25% thought that they were in a bank account somewhere!
- 50% didn’t know if they were saving enough to retire.
- 20% said that they never check on their pension.
Although this is not necessarily an issue for younger people. A survey by Peoples Protection found that from their representative survey sample:
- 16% had never checked on their pension
- 24% said they checked their pension less than once a year
- 20% checked every six months and
- 9% of men checked every week (probably overkill!)
We’d advise keeping tabs on your pension at least annually when you are younger and increasingly as you move towards retirement, as long as you have an idea of how much you need to retire and what you want.
Tax efficiency is also a key component of financial advice. According to HSBC 82% of clients who use a financial advisor are either higher rate or additional rate taxpayers who are looking for tax effective financial advice. But only 52% of people currently use their maximum ISA allowance and less than 50% use their maximum pension allowances.