18th December 2015
Millions of financial products are being purchased blindly without the consumer undertaking any research beforehand.
Research by the International Longevity Centre-UK has revealed 18.2 million people took out a financial product in the past two years, with 3.1 million of those investing in risky assets.
Of those buying a product, one in 10 have seen an independent financial advisers (IFAs)– equivalent to two million people in terms of total population – but more concerning is that 2.7 million people who took out a product in the last two years did so without collecting any information.
Best buy comparison website were most likely to influence decisions about product purchase, followed by information from product providers.
A total of 6.1 million were influenced by best-buy information, and two million sought out an IFA. Another 1.7 million were influenced by family and friends.
Those aged 55-plus were more likely to be influenced by an IFA or the provider. Homeowners were also more likely to be influenced by an IFA while only one in 16 renters would take an IFA’s recommendation – this compares with one in eight homeowners.
Consumers who are most financially stable – who know how much they have in the bank – were more likely to choose DIY financial solutions by surfing best buy websites or shopping around.
The number of people not collecting any information or just relying on friends and family totals 4.4 million.
Cesira Urzi Brancati of the ILC-UK, said: ‘The demand for independent financial advice is mainly driven by trust. We will not expand access to advice without action to raise trust in advice.
‘Sadly, advice too often does not reach those who need it the most. For some, however, overconfidence is an impediment to getting advice.’