Advice opportunities but barriers remain

Taking financial advice helps people feel more confident about money and positive about the future, yet lack of understanding about who advice is for means many are missing out on these benefits.

That’s one of the key findings of our Relationship with Money report, based on a Censuswide survey of 2,000 adults earning over £50,000 a year. The report highlights a significant opportunity for advisers to grow their client base, with only 27% of respondents using a financial adviser. The take-up of advice was low even among those in the highest income brackets – just 40% of those earning £100,000-£149,999 use an adviser, rising to 57% of those earning over £150,000. 

Overcoming advice barriers

There are, however, several barriers to overcome before advice can be extended to more people. When we asked respondents why they don’t use an adviser, the most common answer was “I don’t want to pay for advice” – demonstrating a need to highlight the value of advice and the benefits it can bring. 

The second-biggest barrier was “I can organise my finances on my own”. However, this is in stark contrast to the report’s other key findings. Only 38% of respondents said they were in control of their money, 34% said they were confident and 45% organised. The report also found a lack of understanding around investing and saving for retirement. Just 54% invest and 53% don’t believe or aren’t sure they will have enough money to retire comfortably on.

Advice triggers

When we asked what might encourage them to seek financial advice, winning the lottery was the most common answer (43%), followed by inheriting money (39%). These came well above retirement (24%) and going through a life stage such as divorce or bereavement (15%). The answers suggest many people believe advice is for the extremely wealthy – i.e., for those who already have a substantial sum of money to invest, rather than for helping them to grow what they currently have. 

Another 27% said they might seek advice if they had greater understanding of how an adviser can help them, again showing the need for greater awareness around the benefits of advice. 

Our survey found these benefits are wide. Among those who took advice, the areas in which they achieved a better outcome by using an adviser ranged from “growing my money” to “peace of mind” and “sense of understanding”. Respondents most valued their adviser for giving them “a solid plan to achieve my goals”. This perhaps demonstrates the way in which the role of a financial adviser has developed over time – moving away from simply growing clients’ wealth towards one of holistic financial planning, which considers every aspect of the client’s life.

Growth opportunity

Considerable opportunities exist for advisers to help more people achieve their goals, gain clarity over their financial futures, and feel confident about saving and investing. Yet there is another barrier to narrowing the advice gap, and that’s the recognition that providing holistic financial planning takes time. This is where a discretionary fund manager (DFM) can help.

At Brewin Dolphin, we have been supporting advisers for more than 25 years. By partnering with us, we will give you back precious time. Time that lets you focus on what you do best: building and nurturing client relationships.

To find out more about how we can work together, visit www.brewin.co.uk/intermediaries  

Follow us: www.linkedin.com/showcase/brewin-dolphin-intermediary/   

The value of investments, and any income from them, can fall and you may get back less than you invested. Information is provided only as an example and is not a recommendation to pursue a particular strategy. Opinions expressed in this publication are not necessarily the views held throughout Brewin Dolphin Ltd.