3 top excuses for not seeking financial advice, and how advisers can overcome them

Sceptical young guy wearing orange t-shirt arguing during meeting, signalling stop with his hand

By AdviceBridge

Misconceptions surrounding financial advice mean millions of people are missing out on expert help that could help them make better decisions with their money. In fact, according to research from Royal London, 9.4 million Brits choose not to seek help from a financial adviser, despite being open to the idea of advice.

While there are a multitude of reasons for someone not taking financial advice, many people are failing to get advice because of misconceptions.

According to the data gathered, there are 3.7 million non-advised customers who are not only open to professional financial advice but also have investible assets worth over £50k.

This amounts to more than £185 billion of unadvised investible assets.

Here are three of the most common excuses why people don’t seek financial advice, and ideas on how you can address these issues and attract new clients.

1. It’s too expensive to talk to an expert

47% of survey respondents said they didn’t seek financial advice because it was too expensive. But the same study found that 40% of people didn’t actually know how much financial advice might cost.

The amount financial advisers charge for their services varies enormously, as does the way advisers take payment. This can cause confusion for people who have little or no understanding of how financial advisers work.

Additionally, many people don’t understand the value of expert financial advice. So, as well as addressing the costs of financial advice, it’s also important to highlight the tangible benefits that you can bring to someone’s financial situation.

How to address the issue

You’re in the business of talking about money, so don’t shy away from being upfront about what and how you charge for your service.

The advice you provide can help clients avoid high charges, which can harm long-term financial goals. By structuring investments tax-efficiently you offer your clients the best potential for long-term growth – so tell them.

According to research by Dunstan Thomas, clients who seek financial advice can hope to be almost two-fifths a year better off in retirement than those who make financial decisions on their own.

The survey found that advised clients could, on average, hope for a total post-retirement, pre-tax household income of £33,557.45, compared with £20,373.40 for those who made their retirement income decisions alone.

Fees clients pay also makes a material difference to their wealth.

The chart below shows the effect fees can have on the value of a client’s investments, assuming 5% growth a year on a £100,000 initial investment.

Paying just 0.5% higher fees could leave a client’s wealth more than £20,000 lower after 20 years, and £45,000 lower after 30 years.

If you are able to keep your fees low it is an advantage, but demonstrating the overall value is what truly counts.

How AdviceBridge can help

The AdviceBridge software shows prospective clients how much they could save in fees and taxes should they seek advice and have their portfolio structured correctly. This goes further than generic examples and looks specifically at their own personal situation, helping you demonstrate the tangible value you could provide.

2. I can look after my own money

35% of survey respondents said they didn’t think an adviser could offer them anything that they weren’t able to take care of themselves.

Meanwhile, 32% said they would find financial advice more appealing if they could access it entirely digitally. This result ties in with the increasing desire of younger generations for technology solutions.

How to address the issue

With potential clients embracing DIY investment solutions, it’s vital that you promote the value of taking professional financial advice and offer a digital or hybrid service.

It’s up to you to communicate your value in a way that is immediately relatable and relevant. For example, expert financial advice can lead to better results, less stress, and more control over finances.

Wherever possible, back your promises up with hard facts.

A study from the International Longevity Centre (ILC), in conjunction with Royal London in 2019, found that “in the space of just 10 years, customers who had sought financial advice were, on average, £47k better off than those who had taken care of things themselves”.

There are plenty of compelling reasons to have a conversation with a professional adviser before committing to going it alone. Make a point of spelling out at least some of these things in your marketing message. And use initial meetings to talk about the advantages you can bring.

How AdviceBridge can help

For those clients seeking digital solutions, AdviceBridge provides an engaging client experience, very quickly showing prospective clients how much they could save in costs, which is typically tens of thousands of pounds.

The goals-based tool enables clients to see how altering their finances will impact them now and in retirement. Additionally, they can access their plan 24/7 and review different goals and scenarios.

Furthermore, you are instantly alerted to the change, which means you know when to step in and add value with specific, personal advice based on your clients’ current circumstances.

3. It isn’t for someone like me

15% of respondents felt their finances were too simple to bother with advice, or that the amount of money they had available to invest wasn’t enough to interest a professional adviser.

While this mindset is understandable, the more worrying aspect is that 31% of this group have investable assets of £50,000 or more.

How to address the issue

As an adviser, you know how valuable financial planning can be for everyone, regardless of wealth.

The ILC report, mentioned above, found that people deemed as “just getting by” benefited from financial advice more than wealthy clients.

And there are useful figures to support this: clients categorised as “just getting by” saw their pension wealth increase by 24%, compared to an 11% increase experienced by “affluent” clients.

Where your business proposition allows, promote your services to all potential clients, not just the wealthy few.

How AdviceBridge can help

The AdviceBridge platform has been specifically developed to help financial advice firms automate all their processes.

Complete automation saves you time and money and frees up more time to focus on the advice relationship.

Using the platform reduces the time taken to onboard a new client from between 35 and 40 hours to less than 5 hours, even if you’re already using tech solutions.

This time-saving translates into an 80% reduction in costs and a 70% increase in profit. So, you can afford to offer your services to those clients you might previously have ignored.

Get in touch

If you want to find out how AdviceBridge can benefit your business and your clients, please get in touch. Email hello@advicebridge.com or call us on 020 3925 3850.