A new report from Canada Life and AKG, titled ‘State of Flux,’ reveals that the financial advice market faces significant challenges, with less than half (45%) of UK adults ever having seen a financial adviser.
The report suggests that the advice gap may widen, as over a fifth (23%) of UK adults are resistant to seeking financial advice under any circumstances – even if it was free.
The study highlights that 21% of those not currently engaging with financial advice feel they don’t have enough wealth to warrant it. Additionally, distrust in financial advisers and fear of aggressive sales tactics are cited as barriers.
Despite these challenges, the report notes that clients with ongoing adviser relationships greatly value them, especially for the personal understanding and peace of mind they provide. However, 12% of consumers regret not seeking financial advice sooner, with concerns about retirement funding and underestimating inflation being primary regrets.
Tom Evans, managing director, retirement, at Canada Life, reflects on the findings: “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.”
The report underscores the need for the financial advice industry to address these challenges through improved communication and marketing efforts, while also embracing technology and encouraging more professionals into the sector.
‘Future of Advice – State of Flux’ is available to read for free here.
