Big rise in younger people seeking financial advice: research

Research from behavioural finance experts Oxford Risk has found that 16% of people aged 18-34 with stock market related investments and savings took more professional financial advice during the coronavirus crisis than they would normally. This compares with just 6% of investors in general who did this.Only 38% of investors aged 18-34 said they had not taken any professional financial advice during the crisis, compared to 60% of all investors. 

Oxford Risk says its findings reveal that the impact of the Coronavirus on savings and investments - especially during the early stages of the crisis - has meant that many young people who have not seen such market volatility and are less experienced investors turned to financial advisers for help and guidance. 

Oxford Risk builds software to help wealth managers and other financial services companies assist their clients in making the best financial decisions in the face of complexity, uncertainty, and behavioural biases. However, it says that many wealth managers and financial advisers are poorly equipped to help clients deal with the emotional and psychological roller-coaster ride their clients have endured during the covid-19 crisis, and the impact it has had on markets and their investments.   

It is encouraging to see from our research that many investors – especially younger ones – turned to professional advisers to help guide them the market turmoil during the early stages of the covid-19 crisis."

Greg B Davies, head of behavioural finance at Oxford Risk, said: "It is encouraging to see from our research that  many investors - especially younger ones - turned to professional advisers to help guide them the market turmoil during the early stages of the Coronavirus crisis." 

"However, unfortunately the systems many wealth managers have in place for supporting clients are too human heavy, inefficient, and front loaded to the beginning of the client relationship. They are poor at adjusting in scale to the changing circumstances during a crisis like the one we are in now." 

"How wealth managers and IFAs understand the financial personality of clients is often limited to poor risk profiling, which is subjective to human assessment. They need to focus more on objective, science-based measures to provide a comprehensive picture of their clients. There is too much guesswork and not enough technology."  

Marcus Quierin, CEO at Oxford Risk, said: "Client assessments are focused too much on the views of the financial advisors assessing them and this leads to results being biased, noisy, and inconsistent. To address this, advisers need to be assisted by better diagnostic tools enabling accurate assessment of a client's personality and likely behavioural tendencies."  

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