The number of Brits using the services of a financial adviser has fallen, according to financial planning company Fairstone.
An independent survey published by Fairstone and Ipsos MORI looks into the changing attitudes towards investing, retirement and financial planning amongst a broad spectrum of consumers, between 2010 and 2017.
Over the past seven years there has been a "worrying fall" in those using the services of a financial adviser and of those surveyed, 28 percent said they did not know who they would be likely to use for pension advice. This trend extended to those reviewing the performance or value their savings and investments with 23 percent of those with financial investments choosing to do so themselves compared with just nine percent of those with financial investments reviewing through a financial adviser. Half of those questioned had not reviewed their savings or investments at all over the last twelve months, the survey found.
Lee Hartley, chief executive of Fairstone said: “The new pension legislation has effectively doubled the period of time that financial advice is needed, yet fewer people are engaging an adviser. As a Chartered financial planning firm, we see this as an opportunity for our business and a major challenge for the industry to engage more with existing and potential clients to ensure everyone who needs it can receive professional financial advice. There is no substitute for long-term financial planning in ensuring a more comfortable retirement. What our survey clearly highlights is that previous initiatives have failed and as an industry we need to step up to the mark and engage with the broader population. Consumers need to be made aware of how they can access the best solutions for their individual circumstances.”
The survey also revealed that cost (26 percent) was the most important factor when choosing an IFA, followed by trust in the adviser (23 percent) and recommendations from friends and family (19 percent). These figures could indicate that following the RDR, immediate cost of advice is viewed as more important than the longer-term objectives of effectively managing investment portfolios.
Whilst auto-enrolment has led to 82 percent of respondents who have a pension plan have a workplace pension, the survey showed that 52 percent have no retirement plans in place and more than a quarter of people who are working have no clear idea when they might retire.
Mr Hartley added: “Auto-enrolment should be applauded for bringing more of the population into some form of retirement planning but it falls short of addressing the significant education job that needs to be done by financial planners such as ourselves and by government to encourage a more long-term and holistic approach to retirement planning – in most cases, auto-enrolment will not meet the income requirements for retirement and planning early can make a significant difference.”
Fairstone is a national firm made up of 300 advisers and 130 staff, acting for over 41,000 clients. It oversees £7.4 billion of client assets with £4.7 billion of funds under management.