Financial advice remains the domain of friends, family and websites, according to a new survey from the Association of British Insurers (ABI), with advisor charging set to make people even less likely to seek out an IFA.
Half of the 2,458 people who responded to the ABI's quarterly consumer survey said that being required to pay directly for financial advice would discourage them from seeking it. Just 14% had seen an IFA in the last year, with 37% saying that they had not received any form of financial advice and 27% citing family and friends as their source of advice. Almost a quarter (22%) cited the website moneysavingexpert.com while 18% had been to a bank or building society for advice.
Just 12% were aware that the imminent implementation of the retail distribution review (RDR) would mean they would have to pay for investment advice in future, rising to 20% of those who already owned an investment product. Half of respondents said that the higher level of adviser qualifications demanded by the RDR would make no difference to the level of trust they place in advisers or their propensity to seek advice. Only 11% thought it would definitely make a difference.
While 64% of people were not sure how much financial advice on pensions, savings and investments was worth, the remainder thought it was worth less than £300 with most saying it was worth nothing. Protection products are exempt from adviser charging and the findings strengthen the argument that including them within the scope of the RDR would have further widened the protection gap.