Less than half of UK adults have seen a financial adviser

Over a fifth say they won’t seek finance advice, even if it was free. One in ten, do not trust financial advisers

Canada Life and financial services consultancy, AKG, have partnered to deliver a comprehensive new report, ‘State of Flux’1, which considers the many factors that shape the current financial advice market, and the potential challenges and opportunities that may be posed for the future industry.

The report proposes that the advice gap could widen before there is any chance of it closing. Currently, according to the report’s findings, less than half (45%)2 of UK adults have ever seen a financial adviser. Perhaps more tellingly, over a fifth (23%) said they will not be swayed to get financial advice no matter the circumstances, and even assuming the advice was free.

Over one in five (21%) who are not engaged with advice, said they believe they do not have enough wealth to warrant seeing an adviser. Two additional indicative reasons to do with perception of advice are ‘not trusting financial advisers’ (11%) and ‘being afraid of pushy sales techniques’ (9%).

On a much more positive note, those that see an adviser on an ongoing basis attach a great deal of value to their relationship. Top value factors include access to someone human who understands the financial situation (19%), peace of mind over financial decisions (19%) and the knowledge that advisers are regulated (18%).

Some consumers (12%) also said they regret not seeing a financial adviser in the past. The top three biggest regrets were: worrying they now do not have enough money to fund retirement (35%), underestimating the impact of inflation (31%) and losing money (27%).

The report indicates that those who have not engaged with financial advice, have unwavering and often jaded views of what the industry stands for or could offer them on a personal level. Indeed, one adviser summarises this neatly in the report commenting that, “Advice needs a stronger brand than it currently has.”3

Explaining the benefits of advice to new clientele has obvious value. Yet the report findings also show that there is a demand for more communication from advisers with their existing client base. Those who have spoken to an adviser in the past five years were asked in what ways they think their adviser relationship will need to adapt or change in the future. The top reason selected from the options provided was “Increased communication and updates, involving more regular check-ins, performance reviews and adjustments as circumstances change (23%).

Insights from speaking to advisers though show that investing in marketing and communications may not be an economically viable option, for at least some businesses. In fact, ‘Marketing costs and issues attracting new clients,’ was the top cause for concern relating to ongoing operations (40%).4

Tom Evans

Managing Director, Retirement, at Canada Life commented:

"Closing the advice gap is clearly not a straightforward issue. In fact, we should be honest with ourselves and recognise there will always be an advice gap borne from people’s lack of willingness to engage, and advisers’ capacity to service. But that shouldn’t mean as an industry we don’t try to do a better job of communicating and marketing both the benefits and value of financial advice.

"Clearly trust or a lack of it, is still a factor that continues to plague the advice market. The fact that one in five people would not see an adviser even if it was free, is quite shocking.

"Why would a customer seek mortgage advice but be confident enough to choose the right path to retirement without advice? We need to be bold and challenge the current status quo, while also recognising that to serve a wider customer group, we need to embrace technology alongside attracting more advisers into the profession.

"The hope is that research such as ‘State of Flux’ will encourage the industry to have open discussions around challenges such as these, and ultimately keep driving the conversation forward."

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‘Future of Advice – State of Flux’ is available to read for free now.

Notes to editors:

  1. Future of Advice – State of Flux was written by AKG and sponsored by Canada Life and Charles Stanley.
  2. Consumer research (quantitative) – This online survey was conducted on AKG’s behalf by Opinium. The research field dates were 22-25 August 2023.The research sample was 2000 UK adults, weighted to be nationally representative.
  3. Adviser research (qualitative) – This element involved facilitation of a series of online/telephone interviews which were conducted on AKG’s behalf by Frank Fletcher of Widewater Consulting in the period between early July and early August 2023.
  4. Adviser research (quantitative) –This online survey was conducted on AKG’s behalf by Pureprofile. The research field dates were 22-25 August 2023.The research sample was 100 advisers.

Enquiries:

Press enquiries should be directed to: Elle McAtamney, Canada Life, 07913 568213, elle.mcatamney@canadalife.co.uk