Financial advice is something that far too few people appear happy to pay for, with most thinking it's unnecessary or too expensive – particularly for those with a relatively small amount to invest. Research from HSBC has highlighted the extent of the issue, and the bank is also looking at ways to rectify things.
The research revealed that a large proportion of investors fail to take any financial advice whatsoever, but this could have an impact on their future returns – particularly if they choose their investments poorly. The figures show that, of the investments made to date in 2016, two-thirds (68%) were made without any financial consultation, while among those planning to invest during the remainder of the year, 51% are unlikely to seek any advice.
Of those, 23% said that they didn't wish to seek advice because it was too expensive, while 10% admitted that they found it too difficult to know where to source suitable advice. Overall, 18% of customers surveyed planned to make an investment during 2016, but with 22% of those having £15,000 or more to invest, failing to seek advice could have long-term consequences.
The lack of will to seek advice could explain why 47% of respondents said they kept their long-term savings in cash, but this in itself may not be ideal. Cash-based investments may be safer but they don't offer as much potential for returns, which over the long-term, is what all investors will be hoping for – even among those with small investments.
Furthermore, even those who do seek advice don't always go about it the right way. Financial advisers (36%), banks (24%) and building societies (15%) remain some of the most popular destinations for securing financial advice, but consumers are increasingly turning to other sources, such as their parents (21%) or friends (12%), and while it can often beneficial to discuss financial matters with a third party, it shouldn't take the place of professional advice.
The fact that so many people feel that independent financial advice is too expensive highlights a clear gap in the market for those who wish to make smaller investments, as a small investment means they don't have the available capital to pay for high-level advice. In response, HSBC is launching a new service known as Stand-alone Investment Advice, a lower-cost scheme that's specifically designed to provide advice to those looking to invest single lump sums of between £15,000 and £100,000.
Whether you choose this service or any other, seeking financial advice is vital. It can be the key to achieving your financial goals and can make your money work far harder for you, so don't go it alone – whether you've got a little or a lot to invest, seek suitable advice and see if you can help secure your financial future.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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