Nearly one in four non-retired respondents (23%), equivalent to 8.4 million British adults, selected 'friend or family member' from a list of preferred advisers on pension assets, up sharply from 15% in the 2011 Barings survey2.
The figures for those aged 18 to 24 are even more acute: well over a third (37%) ask friends or family, far higher than the 25% that turn to a financial adviser or accountant. In the next age segment, those aged 25 to 34, 27% say they ask friends and family, slightly more than 25% who discuss their pension needs with a financial adviser.
Intermediaries remain the most popular source of advice overall: they were selected by a third (34%) of non-retired respondents for advice on pension asset allocation, the equivalent to 12.1 million people. However, this market share has remained flat compared to last year (31%) as well as 20103 (33%) and 20094 (36%), but down from its peak in 20085 (40%). In contrast, the numbers of people turning to their bank is rising, up to 15% versus 9% in 2011.
Despite the changing sources of financial advice, the majority of non-retired British adults (58%) said that they do consider it their responsibility to ensure they fully understand the asset allocation of their pension funds. However, when asked when they last reviewed their pension plans, 45% of non-retired respondents said they had 'never' done so, while for those who had reviewed their plans this was, on average, 2.4 years ago. When asked about the last time they had made a change to their pension and investments in order to better reflect their risk profile, 38% of respondents said they had 'never' made such a change, while 5% - equivalent to 2.3 million people - said they had done so more than ten years ago. The average answer to this question was 1.7 years ago.
Marino Valensise, chief Investment Officer at Barings, said: "Millions of people may be exposed to poor asset allocation and inappropriate levels of risk due to a refusal to review their pension investments regularly and with the correct levels of advice."
Looking at people who had reviewed their pension plans, atwo in five (41% of people) - corresponding to 8.1 million - were unable to say whether they had selected the default option or not for their pension investment. More than a third (35%) - 7 million people - said they opted for the 'default' investment option, meaning their pension provider selected funds on their behalf. However, of those that selected the default option, over a third (38%) rated the advice and explanation around the default process as either poor or non-existent.
Marino Valensise continued: "It will be interesting to see how the findings have changed next year in the wake of the Retail Distribution Review, and whether the sources of advice continue to split."
1. Research conducted online by ICM research on behalf of Baring Asset Management of 1,567 non-retired GB adults between 29th - June 1st July 2012. Population figures have been weighted (using ICM UK adult population figure of 47.358 million) and are representative of all GB adults (aged 18+).
2. Research conducted online by ICM research on behalf of Baring Asset Management of 1,589 non-retired GB adults between 1st-3rdJuly 2011. Population figures have been weighted (using ICM UK adult population figure of 47.36 million) and are representative of all GB adults (aged 18+).
3. Research conducted online by ICM Research on behalf of Baring Asset Management of 1,478 non-retired GB adults between 2nd and 4th July 2010. Population figures have been weighted (using ICM GB adult population figure of 47.36 million) and are representative of all GB adults (aged 18+).
4. Research conducted by ICM between 3rd and 5th July 2009. The survey was carried out online among a sample of 1,574 non-retired adults. Population figures have been weighted (using ICM UK adult population figure of 46.30 million) and are representative of all GB adults (aged 18+).
5 Research conducted by ICM between 27th and 29th June 2008. The survey was carried out online amongst a sample of 1,000 adults. Population figures have been weighted (using ICM UK adult population figure of 45.89 million) and are representative of all GB adults (aged 18+).