Professional financial advice – ONLY 18% listen! ..Part 3
Taking professional financial advice – Part 3
Why only 18% of adults seek professional financial advice.
Even though my previous articles have shown working with a financial adviser can produce a real tangible financial gain (Part 1) and actually make you happier (Part 2) less than 20% of UK adults actually engage with one (18% to be precise).
Indeed, according to research by the People’s Pension, more UK adults (26%) have used online consumer websites and 30% of UK adults would rather use online tools than speak to a financial adviser face to face. Even though we have already shown that people ‘just getting by’ could be over £26,000 better off over a 10 year period by working with a financial adviser many would only be willing to pay £120 for the privilege! I know when I was advising that figure would probably just about cover the cost of the first meeting and the coffee!
The good news is, however, that over 53% of people are willing to pay for financial advice. So financial advisers really need to work on the disconnect between the fees they wish to charge and the fees many are willing to pay! They need to find out what people actually value.
If 82% of UK adults are not engaging with financial advisers then we need to find out what the 18% who are engaging actually value for their fees.
As well as 78% of active clients really valuing the adviser meetings clients confirmed that out of 35 different dimensions they feel they are paying for three main things:
- The development of a financial plan
- The defining and articulation of their goals
- Ongoing monitoring of their goals and plan
Paying for investment performance comes a poor fourth with the other 31 items regarded as ‘table stakes’.
Yet many financial and investment advisers spend a fortune articulating the ‘value’ they provide in investment performance – a disconnect perhaps?
Vanguard actually deals with the disconnect within the report, confirming that many advisers simply do not ask for feedback and are spending their time ‘automating’ many of the client contact points.
The final point within this article links back to fees. Existing clients who have had clear discussions regarding the fees they are paying value the adviser relation the highest!
Our takeaway, if you are a financial adviser and you want to connect with the missing 82% focus on the value you can bring in defining their goals, build a plan and spend plenty of facetime communicating both. And, be clear about what they will be paying for the value you bring!