Are financial advisors missing out on 1.2 million clients?
23 Sep 2020
21% of Savers and Investors take some form of financial advice
Most Savers and Investors (72%) adopt the DIY approach to saving and investing, i.e. they manage all of their saving and investments totally themselves. 21% of Savers and Investors take some form of professional guidance and/or advice, of which 17% adopt the mixed or hybrid approach, combining self-management of some of their savings and investments (or some of their decisions) with getting help from professional financial advisors, with only 4% handing over all their investing decisions to professional advisors (the Professional Approach).
Financial advice usage rises with wealth
The percentage of Savers and Investors who want some form of professional help (i.e. adopt the Professional Approach or Mixed Approach) tends to be higher if the saver and investor:
- has more wealth
- holds investment products rather than cash-based savings products (i.e. is an Investor rather than a Saver)
- makes plans for their financial future (i.e. is a Strategist) rather than not making plans (i.e. The Impromptu)
- accepts risks
- wants capital gains rather than income
But financial advice is not reaching the wealthy under-advised
There is a pool of Wealthy Investors (i.e. those with wealth in saving and investment products, other than pensions and property, of £75,000 and above) who currently do not take professional financial advice and so could be targeted by professional advisors. Among these individuals the core target for advisory firms are Wealthy Investors who are currently Under-Advised, that is they self-manage their own savings and investment while also lacking the fundamental skills and confidence to do so. If these individuals could be converted to consumers who take some professional advice, this could expand the customer base for financial advisors by around 1.2 million consumers.
Retail Financial Advice Report
These findings come from the IRN Research report Retail Financial Advice 2020. The aim of this report is to study how UK consumers obtain and judge the advice they receive when they make financial saving and investment decisions. The report considers what types of advice consumers use, where they and how they access advice and how willing are they to pay for advice. It also considers how consumer investment behaviour has been influenced by online developments such as Robo-Advice and how advice has influenced consumer reaction to COVID-19 and saving and investment scams. For this report, IRN Research commissioned Made in Surveys Group (MIS) to conduct a survey among its online panel, drawing on a nationally representative sample of 2,076 UK adults aged 18+, which generated a sample of 2,032 individuals own any savings or investment products.
Related IRN Reports
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