A bad financial decision could be a costly mistake to make. So for those complex choices it can be worth seeking good advice. But not everyone does. So have you ever thought about financial advice before?
It might not be a million dollar question, but most people at some point in their life will need some help when making a financial decision.
For the more straightforward choices – taking out insurance or choosing a bank account, you might use free sources of information to make your decision. But what about buying a house? Or deciding how to access your pension?
The government and financial regulator (FCA) are exploring how to make the financial advice sector work better for you. Much has been made of the “advice gap” where people who want or need advice can’t get it. But we’re interested to know what improvements you think are needed.
Trust in financial advice
Paying for financial advice could be one of the best investments you make, but many people don’t trust independent financial advisers and think they’re too expensive.
Our research shows the average amount people say they’d be willing to pay for advice on investing £60,000 is around £260, but this is more likely to cost around £1,450.
As Carolyn from Hartlepool told us:
‘I want to know I will be able to live comfortably in my later life. Not having to choose between food and heating. I want to know that I can trust advice I am given is going to be the best for me, not in the best interest of the financial advisers.’
We agree that more needs to be done to bring down the high cost of advice. And there are already some providers offering online advice at a cost much closer to what people are happy to pay. We’re calling for the FCA to focus on making it easier for industry to create new ways to give advice, without reducing consumer protection, as this should reduce costs significantly.
We also think the FCA should consider requiring firms selling certain products to give people better information and risk warnings so they can assess the suitability of their own decisions.
A return to commission?
Worryingly, in recent weeks, it’s been revealed that the regulator is considering allowing commission-based sales of financial products, arguing that it’s simply the high upfront cost that puts people off getting advice.
We’ll be pushing back strongly against this as we’re concerned that it could be a return to the days when commission was hidden and mis-selling was incentivised. The Financial Advice Market Review will make its recommendations in time for the Budget in March, and we’ll be keeping a close eye on this.
So what we’d like to know is what do you think the solutions should focus on? Have you sought financial advice before, did you find it easily accessible?
Have you taken professional financial advice before?
Yes I have (55%, 755 Votes)
No, I've never sought financial advice before (40%, 544 Votes)
No, I've sought advice before but I haven't taken it (5%, 70 Votes)
Total Voters: 1,369