The research into the so-called ‘advice gap’ was carried out by online financial advice service OpenMoney in conjunction with pollsters YouGov and follows up research from Citizens Advice into access to financial advice.
Key findings from the survey of 2,000 adults found:
• Nearly 400,000 more people fall into the ‘affordable advice gap’ - they are willing to pay for advice but think it is too expensive. Up to 5.8m would be willing to pay for advice if it cost less
• The free advice gap, which affects people who want advice but are unable to pay for it and are unaware of, or unable to access, free services, has increased by over 5m people in the last four years
• Up to 19.8m people who feel they would benefit from free advice have not received any in the past two years.
• The ‘awareness and referral gap’, which affects people who do not know where to get advice, has increased by over 5m since 2015 to 15.2m people
• Up to 20.8m people have fallen into the ‘preventative advice’ gap and suffer from financial problems due to non-money issues - although this is down from 23m in 2015
The findings form part of a review of the nation’s wealth, debt and need for advice: The UK Advice Gap: Are Consumer Needs For Advice And Guidance Being Met?
The study reviewed four advice gaps identified by Citizens Advice in 2015 to understand whether they still exist and if the availability of advice services has improved over the last four years. It found that all four gaps remain substantial and three have widened.
The FCA recently signalled its intention to look at the advice gap in its call for input on Evaluation of the Retail Distribution Review and the Financial Advice Market Review, asking how consumers access advice and guidance and barriers to making services more affordable.
Anthony Morrow, chief executive of OpenMoney, said: “It is clear that many more people would benefit from taking financial advice and the reasons why they don’t are not as straightforward as it being too expensive, or individuals not having enough money.
“Robo-advice’ is often touted as filling the mass market advice gap, but while some digital providers now offer one-off advice, many simply offer online investment management without real financial advice and personal recommendations. Without offering personalised ongoing advice, these digital wealth managers cannot replace the service provided by advice professionals.
“Bridging the advice gaps requires the financial services industry to work together with financial guidance organisations and a wide range of bodies including the Government, FCA, local government, employers and medical professionals to improve awareness and take up of existing financial support and promote the benefits of protecting our financial futures through money management, Financial Planning and, crucially, suitable financial advice.”
YouGov surveyed 2,088 adults online in January.