The advice industry has to use the increased interest in financial planning to its advantage, as research shows that the sector is no longer a ‘taboo’ subject for Brits.
Canada Life and AKG surveyed over 1,000 UK adults and found 57% reported not seeing a financial adviser in at least 5 years.
But, financial planning is no longer the ‘taboo’ subject anymore as 40% said they had discussed financial planning with family or friends in the past year.
The impacts of coronavirus may well act as a catalyst for more discussions, as 29% reported having such a discussion in the last month because of the effects of the virus.
Canada Life has said that the majority of advisers’ business models today cater to retirees that can be classed as ‘Financially Mature and Stress Free’ – those with strong financial foundations due to good fortune in their family and working lives.
However, International Adviser reported in September that this group makes up just 21% of the market today and is expected to decrease as a proportion of the total market over the next 15 years.
To weather this decline, the research shows that advisers could work harder to communicate the value and benefits of their service, as 27% of Brits simply didn’t see it as a service they should pay for.
The survey also revealed that 43% of Brits favoured a DIY approach to their finances and 20% were concerned about being targeted by pushy sales techniques.
But the picture was more positive among those who have received financial advice, 55% said the greatest benefit is the ‘peace of mind’ provided by their relationship with an adviser.
This was followed by, ‘access to ongoing support’ and ‘ideas on finances/investments’ which were selected as other key benefits of advice by 48% and 42% of respondents, respectively.
The research also highlights that navigating retirement effectively is still a concern for many as 39% of respondents said they would consider paying for advice at this time.
Inheritance planning and ongoing advice around pension planning were the next most significant with 32% and 31%, respectively.
Pool of opportunity
Andrew Tully, technical director, Canada Life said: “These results have provided an interesting snapshot on the potential clients for advisers today and, crucially, tomorrow.
“With future customers looking to DIY approach to financial planning the onus is now on advisers to highlight not only the great service they provide but also the priceless ‘peace of mind’ they can offer.
“I’m not surprised to see retirement planning emerge as a key concern for potential customers.
“The combination of pension freedoms and auto-enrolment creates a significant pool of opportunity for advisers as millions face more complicated questions around how much to save, when to retire and how to pass on wealth to the next generation.”