Millions of people are missing out on financial advice that could help them reach their goals because of misconceptions, research finds. Speaking to a financial planner can help you organise your finances, understand the impact of your decisions, and make sure you’re on track to reach future goals. Peter Banks, Independent Financial Adviser at Pembroke Financial Services, explores some of the excuses.
According to Royal London, 9.4 million people in the UK choose not to look for a financial adviser despite being open to the idea of advice. While there is a range of reasons someone may choose not to take financial advice, the survey suggests that some are not seeking advice due to misconceptions. Among them are:
1. Financial advice is too expensive
Peter said: “Almost half (47%) of respondents said that one of the reasons they didn’t seek financial advice was that the cost would be too expensive. Interestingly, 40% also admitted they didn’t know how much it might cost to seek financial advice.
“How financial advisers charge varies depending on the firm and your circumstances. This may be a one-off cost or an ongoing percentage of your assets. Financial advisers must be clear about the cost of financial advice. Many will also offer an initial meeting free of charge so you can meet them, discuss your needs, and understand if they can help you. If you’d like to discuss our services and fees, please contact us.”
When weighing up the cost of financial advice, it’s also important to look at the bigger picture. A study from the International Longevity Centre (ILC) published in 2019, found that advised clients accumulated more wealth than non-advised clients. It found that those that took financial advice between 2001 and 2006 were, on average, £47,706 better off in 2014/16.
2. I can look after my own money
Over a third (35%) of respondents said they didn’t take financial advice as they felt confident enough to do it themselves. Even when you’re in control of your finances, working with a professional can still add value.
Financial advice can help you understand all the opportunities you have and how best to reach your goals. It can also make sure you are taking advantage of tax-efficient options to help make your money go further. Working with a financial planner doesn’t mean giving up control of your assets but provides you with additional support so you can be confident in the decisions you’re making and the long-term impact they could have.
3. Financial advice isn’t for someone like me
“You may think that your net worth or a particular asset has to be above a certain figure to make financial advice worthwhile. However, financial planning can help a range of people,” Peter explained.
“The ILC report mentioned above found those deemed “just getting by” benefited from financial advice more than wealthy clients. Clients in the “just getting by” category saw their pension wealth increase by 24%. This compares to an 11% increase experienced by “affluent” clients. If you’re not sure if financial advice is right for you, please give us a call.”
4. It isn’t something I’ve thought about
For one in five (22%) financial advice simply isn’t something they’ve thought about. With day-to-day decisions to make, thinking about your medium- and long-term finances can be a task that gets put off. However, taking even small steps now can help you have a more secure future that meets your aspirations. Booking an initial meeting with a financial planner is a simple step to take in that direction.
5. I don’t like talking about money
Peter added: “Talking about money is still something of a taboo subject. Even among family and friends, money is something we rarely talk about, so it’s to see why some people may be put off talking to a financial planner. In fact, 17% said they were too proud or too embarrassed to talk to someone about how to manage their finances.”
If you’ve put off seeking financial advice for this reason, focusing on how an open discussion about your finances can help you reach goals, from retiring early to creating a nest egg for children, can help. Meeting with a financial planner isn’t all about discussing how much your assets are worth either. While your finances play a role, understanding what you want to achieve and how your assets and decisions can help you reach them are just as important.
If you’re ready to discuss your finances or have any questions about how financial advice could help you, please get in touch.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.