Nearly six million people would be willing to pay for advice if it cost less, according to research conducted by the online financial advice service OpenMoney in conjunction with YouGov.
The findings form part of a detailed look at the nation's wealth, debt and the need for advice: The UK Advice Gap: Are Consumer Needs For Advice And Guidance Being Met? The study reviewed four advice gaps identified by Citizens Advice in 2015 to understand whether they still exist and if the availability of advice services has improved over the last four years. It found that all four gaps remain substantial and three have widened.
Nearly 400,000 more people now fall into the affordable advice gap, which affects consumers who are willing to pay for advice but think it is too expensive. The research suggests that up to 5.8 million people would be willing to pay for advice if it cost less.
It is clear that many more people would benefit from taking financial advice and the reasons why they don’t are not as straightforward as it being too expensive."
Mind the gap
The free advice gap, which affects people who want advice but are unable to pay for it and are unaware of, or unable to access, free services, has increased by over 5 million people in the last four years. Up to 19.8 million people who feel they would benefit from free advice have not received any in the past two years.
The awareness and referral gap, which affects people who do not know where to get advice, has increased by over 5 million people since 2015. As many as 15.2 million people who would benefit from free advice not aware of public financial guidance.The preventative advice gap affects those for whom non-money issues can impact their financial position. Up to 20.8 million people have fallen into the preventative advice gap at least once in their life, although this is down from 23 million in 2015.
The FCA recently signalled its intention to look at the advice gap in its call for input on Evaluation of the Retail Distribution Review and the Financial Advice Market Review, asking how consumers access advice and guidance and barriers to making services more affordable.
Anthony Morrow, CEO of OpenMoney, commented: "It is clear that many more people would benefit from taking financial advice and the reasons why they don't are not as straightforward as it being too expensive, or individuals not having enough money. ‘Robo-advice' is often touted as filling the mass market advice gap, but while some digital providers now offer one-off advice, many simply offer online investment management without real financial advice and personal recommendations. Without offering personalised ongoing advice, these digital wealth managers cannot replace the service provided by advice professionals.
"Bridging the advice gaps requires the financial services industry to work together with financial guidance organisations and a wide range of bodies including the government, FCA, local government, employers and medical professionals to improve awareness and take up of existing financial support and promote the benefits of protecting our financial futures through money management, financial planning and, crucially, suitable financial advice."
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