Only a handful of people consult a professional adviser before making important financial decisions.
Research by pension giant Aegon revealed only 8% of people speak to a financial adviser before making what could be a life-changing decision about their money.
Nearly half of those asked preferred to make the decisions themselves, while 41% of married couples discuss their finances together.
Aegon pension director Steven Cameron said: “The low take-up of financial advice is very worrying. Greater personal responsibility for retirement planning combined with increased levels of economic and political uncertainty, mean people need professional financial advice more than ever.
“In fact there are few people who wouldn’t benefit from financial advice at some point in their lives, especially since the introduction of pension freedoms.
£500 to pay for advice
“Our findings emphasise the scale of the task facing the Financial Advice Market Review (FAMR) in making advice and guidance more accessible. It’s important the FAMR delivers on the recommendations made last year and opens up access to advice in its widest sense.”
As part of the review, the government wants to give retirement savers the chance to take advice from an IFA by earmarking £500 in a pension fund as available to pay for financial advice before retirement.
“Meanwhile, people shouldn’t feel they should make financial decisions on their own,” said Cameron. “For some people, the support they need may be relatively simple and there are free sources of guidance available, for example from Pension Wise on pension freedoms.
“Providers and possibly their employers can also provide basic information. But for the more important or difficult decisions people should seriously consider paying for financial advice and in many cases, the benefits of getting things right can far outweigh the costs. It might be money well spent to ensure they are doing the best they can with their finances for their financial futures.”
Cameron went on to explain that three fear factors stop people taking financial advice:
- They don’t where to start
- They are worried about the cost of advice
- Scammers have made consumers worried about trusting advisers
“We must recognise there are reasons beyond cost that people might not seek financial advice that also need to be addressed as an industry,” he said.