The biggest barrier for financial planners to grow client numbers is cost rather than trust, according to a survey.
Fidelity International’s ‘The Value of Advice’ report in conjunction with CoreData found 37% of respondents that had never received advice had not seen one due to cost. Another 35.8% said they did not feel their circumstances justified the need.
Further down, only 16.2% said they had ‘difficulties finding someone they could trust’.
While many believed they could not afford an adviser, 45.7% of respondents who had received advice in the past or had never received advice said they ‘would seek help to invest their money’. Another 42.7% said they thought an adviser could held them to grow and manage their wealth’.
Speaking at the launch of the report, CoreData managing director, Jason Andriessen said people who needed advice were being priced out.
“There is an advice gap emerging over the last couple of years and we should all be concerned. Ultimately, people want a feeling of confidence and control,” he said.
“If advisers are able to do that without spending three appointments to write a statement of advice, that’s the key to reducing cost. Regardless of wealth, people benefit from the feeling of being confident and having control.”
The report noted that adviser faced the challenge of convincing individuals of the broad value of advice and that “seeking advice could address issues beyond the financial, having a positive impact on overall wellbeing”.
“Individuals can also be put off seeking advice by a perceived lack of transparency of cost. In the face of uncertainty, their questions are often left unanswered or worse, filled by misinformation,” the report said.
The report also found that 52.8% of those surveyed said financial issues had adversely affected their mental health, another 48% said financial issues had adversely affected relationships with family and friends, and 37.4% said financial issues had adversely affected their physical health.