In its Advice Gap Report 2023, published today (May 11), the Lang Cat asked advisers of their views in general on the advice gap, what is causing it and what could or should be done to address it.
The biggest chunk of responses (42 per cent) contained a degree of concern towards the cost or profitability of stepping outside of the typical portfolio sizes outlined previously in order to serve lower value clients.
A quarter (25 per cent) of respondents mentioned the regulator in their response to the question.
However, the next biggest segment related to education, with 18 per cent of comments outlining that one avenue to narrowing the advice gap begins as early as school years, with financial education from primary school to the workplace playing a key part.
Speaking on a panel discussion at the report’s launch today, Sally Plant, head of financial planning at the Chartered Institute for Securities & Investment said one of the aspects of the report that stood out to her was around education.
She said lots of professional bodies and trade bodies are trying to improve financial literacy within schools but the key question is when does that literacy benchmark information need to come?
“Is it at school level or is it perhaps more at age 30 level so people understand what planning is,” she asked. “This is so they understand what advice is good advice and how they access it.”
The research, which was conducted by YouGov in February 2023 with a total sample size of 2,035, found that the majority (88 per cent) of those who take ongoing financial advice said it represents value for money, and that figure is almost the same (86 per cent) for those who have received one-off advice.
However, of those who did not pay for financial advice in the past two years, 70 per cent said it was unlikely they would do so in the future.
One of the barriers was trust, with almost two-fifths (38 per cent) saying their lack of it would need to change for them to seek advice.
Plant said: “Obviously we all have a big role to play in improving consumer confidence but much of that comes down to education, and many of us are trying to do something in that space.
“We really need to focus on what point that education needs to come because it's a continuous conversation to improve trust. It's not a one hit wonder.”
