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Growing advice gap hits a quarter of savers and investors

Tahmina Mannan
Written By:
Tahmina Mannan
Posted:
Updated:
05/12/2014

More than one in four people looking for financial advice find it difficult to source help despite having an average £240 a month to save or invest, according to research.

Half of the 2,169 UK adults surveyed by Yorkshire Building Society believed their savings and investments were too small to interest financial advisers, while one in five blamed the withdrawal of financial advice services on the High Street and financial advisers closing businesses.

However, the report found clear evidence of a growing demand and need for advice. It revealed that 47% of people are deterred from investing in equity-based products due to a lack of knowledge.

Some 35% of savers are put off saving due to the current low interest rates driven by the Bank of England keeping the base rate at 0.5%.

The research among savers is echoed by financial advisers themselves with 91% warning of a growing financial advice gap in the UK. 45% blamed the introduction of the Retail Distribution Review (RDR) and 23% said the withdrawal of advice on the High Street was making it harder for savers to find help with their investments.

Advisers expect the situation to worsen – 53% said they have had to stop advising some clients as their accounts were no longer commercially viable.

The average minimum investable amount set by advisers for their clients is nearly £50,000. The study found 47% of those with savings or investments have a kitty of less than £10,000.

Simon Broadley, retail investments manager at Yorkshire Building Society, said: “The introduction of the Retail Distribution Review has been good news for customers by making it clear how much advice costs but there are wider issues to consider.

“Clearly there is a problem when 27% of people who want advice are finding it difficult or very difficult to find help. There is a definite demand among savers and investors for help that is not being met.”

Yorkshire Building Society has partnered with Legal & General to offer tailored advice for all its customers including detailed no obligation recommendations following initial consultations with a fully-qualified financial consultant.