Despite growing financial challenges, better awareness of the benefits of financial advice is required to encourage younger generations to seek the support they need.
As the sixth and final chapter of St. James’s Place’s (SJP’s) Real Life Advice Report launches today, SJP outlines focus areas to help break down the barriers preventing more people from accessing financial advice and guidance.
When looking at where young people get information about finances and money, 18–34-year-olds are twice as likely to use social media channels on average (31%) than 35–54-year-olds (14%) and much more likely to turn to specific social media influencers, 17% compared to 8% of 35–54-year-olds.
Whilst turning to parents and friends remains very important for 18-34 years olds – 41% and 31% respectively – the growing trend to seek financial information about finances and money through social media shows the importance for the industry to embrace digital channels further.
With younger generations facing economic hurdles earlier in life, including a tougher set of circumstances to get on the housing ladder as well as more responsibility to provide for their retirement later in life, there is a growing need for financial advice and guidance to support this cohort.
However, SJP’s study, which surveyed just under 12,000 individuals, showed that amongst those that currently don’t access advice only one in five (18%) 18–34-year-olds think they would find it beneficial in the future.
Meanwhile, nearly one in three (29%) say their personal situation is too simple to require advice, 14% have not considered financial advice because they are not aware of its potential benefits, and 13% think it’s too early to take professional financial advice.
Mark FitzPatrick, CEO of St. James’s Place, said: “In today’s world, rising living costs, delayed homeownership, and the decline of traditional pension schemes have created immense pressures for younger generations. Yet, there is also the promise of the great wealth transfer for some, which could redefine financial opportunities. These factors make financial planning more critical—and yet more complex—than ever before.
“While it is good news that young people are thinking about their finances earlier on, our study shows that too many simply feel that that ‘financial advice is not for them’ or aren’t aware of how it can help. It’s critical that we continue to raise further awareness and break down the barriers preventing people from accessing the advice or guidance that can help them. Having support to navigate life’s uncertainties and point people in the right direction can be life changing.”
SJP is calling upon the industry to focus on the following actions to help more people overcome the barriers and benefit from financial advice:
• Train more advisers. To inspire more talent to enter our profession, we must show people that financial advice is a meaningful, people-focused career that can help transforms lives. The St. James’s Place Financial Adviser Academy is committed to introducing hundreds of new professionals into advice every year. We must continue our efforts across the industry to draw in people from diverse backgrounds and experiences to better reflect the changing society in which we live in.
• Close the gap between guidance and full holistic advice. The Government and Financial Conduct Authority’s Advice Guidance Boundary Review presents a pivotal opportunity. The proposed models of ‘Simplified Advice’ and ‘Targeted Support’ could help reach more people, but we must tread carefully to protect consumers while making support widely accessible.
• Change perceptions around financial advice. We must come together as an industry and do more to illustrate how advice can make a tangible difference and extend our outreach to those who feel that advice “isn’t for them”. Education and awareness are key to this.
Mark FitzPatrick, CEO of St. James’s Place, concluded: “We’ve seen how financial advice has empowered individuals to overcome challenges, realise their aspirations, and build resilient futures. Misplaced perceptions and outdated views of financial advice keeps millions from experiencing the benefits that could help them navigate today’s increasingly complex financial landscape. Acknowledging this is only the beginning. “
St. James’s Place’s Real Life Advice Report explores the benefits of accessing financial advice or guidance through diverse real-life stories from its advisers and clients. The report, released in a series of chapters, aims to highlight how financial advice and guidance can benefit everyone.
