Majority of Britons do not trust financial advisers, new research reveals
Less than two in five of UK adults have sought independent financial advice at any point in their lives, new research from My Pension Expert has revealed.
The retirement finance specialist surveyed over 2,000 UK adults and found that the majority (57 per cent) do not trust independent financial advisers (IFAs) – this rises to 65 per cent among those aged 55 and over.
Indeed, over a quarter (26 per cent) say they have previously been pressured by an adviser into purchasing a financial product without fully understanding what it was, while 13 per cent have lost money having followed the recommendations of an adviser within the past year.
Three quarters (75 per cent) of Britons also believe that independent financial advice is too expensive.
As a consequence, just 38 per cent of UK adults have sought independent financial advice at some point in their lives. Instead, 65 per cent said they prefer to use free online advance, while 76 per cent feel confident enough to make their own financial decisions.
My Pension Expert’s research also revealed that an overwhelming majority (78 per cent) of people would be more inclined to seeks advice from IFAs if harsher punishments were introduced for advisers engaging in unethical practices. A similar number (76 per cent) also called for greater transparency around how advisers calculate their fees.
Andrew Megson, executive chairman of My Pension Expert, says: “The lack of trust in independent financial advisers is alarming – it is a wakeup call that the financial services industry cannot afford to ignore.
“Financial advice is not all smoke and mirrors. It genuinely helps people to make informed decisions about their financial strategies, from savings and investments to life goals and retirement. However, poor past experiences, heavy-handed sales tactics, complicated fee structures and unnecessary jargon are all making people turn their backs on IFAs.
“The industry must act to change public perception of financial advice. IFAs must be more transparent, use plain language and any untoward practices have to be punished. Otherwise, Britons will only become more reluctant to seek financial advice. And in the current economically volatile climate, this could prove disastrous for people finances.”