Friends, family and Google most sought after for financial advice
According to a study by Capital Employee Benefits, more people are turning to unregulated avenues for financial advice instead of employing the services of regulated advisers. In a survey of over 3,000 people, it was found that:
- 37% use Google to research financial products
- 33% turn to friends and family
- 22% read personal finance pages, or tune in to money TV and radio programmes
- None of the respondents mentioned regulated financial advice
People being inclined to approach friends and family for advice is not new information - this study's results sit comfortably with findings from Aviva, reported in the Telegraph in 2011, which found that "almost three-quarters of 18-24 year olds would turn to friends and family for financial advice first rather than looking to a professional adviser". That study did also conclude that this attitude adjusted with age, as the number dropped to a quarter of over-65s.
It stands to reason that those in their teens or early twenties do not use financial advisers because they do not have much money and are reluctant to pay for advice, as well as considering that their parents or friends in similar situations will know what to do. In comparison, those in their sixties will be thinking about retirement and are more likely to require advice on investments and making the most of their money.
Retirement remains an area of much confusion, with the Capital Employee Benefits study finding that 52% "would be more willing to save into a pension if they had a better idea of how they worked". As it stands, 61% of women and 52% of men find the communication around pensions is so confusing it deters them from saving effectively. While it's good that older people are seeking professional advice for their retirement, it would be much more effective if they had been able to maximise their pension by understanding how it worked by having regular reviews. Although pensions are used by older people, it's important younger people understand how they work and they benefit of saving from a younger age because the pots will be bigger if they are given more time to grow.
This is the benefit of professional advice: it helps you understand the complexities with an aim to maximising your investments, instead of trying to work it out by yourself based on the thoughts of unqualified people. With 48% of respondents claiming to be cautious or very cautious with their pension investments, and less than 17% adventurous or very adventurous, it's clear that not taking advice could result in a much smaller pot.
This isn't to say that you shouldn't listen to people, or consult the Internet. It's always a good idea to try and gain an understanding of retirement products, even if for no other reason than being able to understand in more depth when talking to an IFA, or knowing what questions to ask. Knowledge is power, after all. It's also always worth remembering that if you are not happy with the advice you have received, you should find other reputable IFAs to discuss your situation with.
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The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new
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