Less than half of the 2,000 respondents asked by Canada Life had seen a financial advisor in the past too, which has led to an ‘advice gap’ with customers and their money matters.
The reasons for this reluctance for being advised with decisions over money were mostly down to not having enough wealth (23%) to justify seeking advice.
Other factors were due to a scepticism of advisors’ methods, with one in ten (11%) lacking trust with them and 9% being afraid of ‘pushy techniques’.
Unfortunately, this has led to 12% having regrets over not seeking the opinions of financial advisors, leading to many feeling anxious for the future. A third (35%) said they were concerned about whether they had enough money to fund retirement, while a similar amount (31%) underestimated the impact of inflation (31%) and 27% worried they are losing money.
The benefits of professional help that customers felt was having peace of mind over their finances, as well as reassurance that the advisor was regulated and understood their situation.
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As the title would suggest, Canada Life’s report A State of Flux found there are some major obstacles facing financial advisors.
Lack of trust a factor that ‘plagues the advice market’
Tom Evans, managing director, at Canada Life, said: “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.”
Evans added: “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.”