Breaking down the barriers to financial advice
The world of financial advice can be a difficult one to navigate for those seeking support with their finances. The choice of services, advisers and products is vast, and people may feel overwhelmed with where to start. Misconceptions about the advice industry may also put people off seeking professional financial advice. Many exclude themselves from seeking advice because they wrongly assume it’s only necessary for complex investments or pension planning.
Millions don’t deem themselves ‘worthy’ of needing advice – considering themselves too young, or not having enough wealth to warrant needing advice. The lack of knowledge about the wide range of advice services available is a challenge to the industry to educate would-be customers about what’s available on the market.
The potential market is massive – Government figures show more than 41 million people across the UK are now members of company pension schemes, a 37% increase in just five years, with the figure standing at 30 million in 2014. As we are all living longer there is an increased awareness about the need to plan for a financially stable future – Government figures show around three in four adults are now saving for retirement.
In an aging population, people need tailored advice to ensure that their retirement savings enable them to maintain the standard of living they are used to during their working lives. Since pension freedoms were introduced in 2015, sales of annuities – which guarantee an income for life – have declined by over 80% as more people embrace flexibility over their retirement cash. However, the increased choice and flexibility thanks to the Pension freedoms often results in further confusion for even the savviest amongst us.