UK: Britons are most likely to turn to friends and family for financial advice - but those who take professional advice recommend it

• 43% of people look to friends or family for help with decisions about their finances
• 95% of people who have visited an IFA feel they have benefited from the experience. 

The top sources of financial advice for UK consumers are friends or family and the internet, according to a survey of over 2,000 UK adults for Aviva’s Value of Financial Advice Report.

On average just a fifth (21%) said they would turn to professional advice from an independent financial adviser (IFA) in the first instance, but people become more likely to seek professional advice about their finances the older they become.

The report, which examines consumers’ attitudes towards their finances and the value they place on professional financial advice, found almost three-quarters (70%) of 18-24 year olds would turn to friends and family for financial advice first rather than looking to a professional adviser, compared with just a quarter (24%) of over-65s. And more than half (52%) of 18-24 year olds said they would use the internet for information about their finances, compared to less than a quarter (23%) of over-65s. However, 28% of over-65s would make an IFA their first port of call for financial advice (see table 1 below).

Table 1: Where do you go for advice when making key decisions concerning your finances?

	All	18-24	Over 65s
Friends or family	43%	70%	24%
Internet	40%	52%	23%
Bank or building society	26%	30%	28%
IFA	21%	9%	28%

Source: Aviva Research

The report found there is strong evidence to show those who use an IFA place great value on the advice they receive, and 95% of those who consult an IFA reported that they felt they had benefited from the experience. Top benefits included feeling more comfortable with how they managed their money (44%) and feeling confident that they were making the right decisions (42%). (See table 2 below).         

Table 2: Top benefits reported by people who met with an IFA

	All
I felt more comfortable about how I managed my money	44%
I felt that I was making the right decisions	42%
I felt secure in the knowledge that I have a financial plan in place	28%
I felt better educated about finance	20%

Source: Aviva Research

42% of consumers who took advice from an IFA said they wanted to check they were getting the best product or deal, and 33% said they did not feel confident they were making the right financial decisions without advice (see table 3).

Table 3: Reasons for using an IFA

	All
Needed general financial advice	56%
Wanted to check I was getting the best product or deal, if I was missing a trick with my money	42%
Needed professional advice about a specific transaction	40%
I was not confident I was making the right financial decisions	33%

Source: Aviva Research

Consumer confusion
There is a lack of understanding among consumers about the scope of professional advice available from IFAs. Most consumers correctly identified that an IFA could help with advice on areas such as savings and investment, pensions and retirement planning, mortgages, tax, and life and other insurance. However, only 15% were aware that IFAs could offer holistic financial planning and decision making advice, and only a quarter (24%) thought they could also help with managing debt. 

Graham Boffey, distribution director, Aviva, UK Life said: “It’s a concern that so many people are relying on friends or family and the internet for financial advice, and  that they are not aware of what an IFA could offer them. But it’s also quite evident that for those who use professional financial advice it adds value and gives them confidence in their decisions. Aviva recognises the value of professional financial advice and is committed to highlighting the value that advisers deliver to consumers.

“New regulation in the form of the Retail Distribution Review (RDR) is due to be implemented at the end of next year, and will mean changes to the way consumers pay for financial advice. Creating a deeper understanding of the benefits to consumers and the value of professional advice is increasingly important as we approach this change.  The Value of Financial Advice report considers the benefits advisers provide to their clients, whether this is through guidance on specific financial transactions, or through all-encompassing holistic financial planning.”                      

Methodology:

The Value of Financial Advice Report was carried out on behalf of Aviva by Opinion Matters, which questioned 2,002 adults in December 2010. The report is a definitive look at the value consumers place on professional financial advice, the triggers causing people to seek financial advice, and their attitudes towards financial advice and their own finances having visited an IFA.

Download Aviva Value of Financial Advice Report (PDF 408KB)

–ends– 

If you are a journalist and would like further information, please contact:

Aviva Press Office:
Jess Geoghegan: 01904 684128 / 07800 695673: jess.geoghegan@aviva.co.uk

The Wriglesworth Consultancy:
Lee Blackwell / Ben Marquand: 020 7427 1400 / l.blackwell@wriglesworth.com

Notes to editors:

Retail Distribution Review (RDR): In order to address the issue of insufficient consumer trust and confidence in the products and services supplied by the market, the Financial Services Authority (FSA) will implement new regulation in the form of the RDR from the end of 2012.

The aim of the RDR is to increase the level of professionalism in the sector and increase transparency to the benefit consumers. The scope of the RDR covers all advisers giving investment advice to customers, but doesn’t apply to those advising on mortgages or general insurance.  The three main areas of focus are qualification standards, scope of advice and paying for advice.

Aviva is the world’s sixth largest* insurance group. We provide more than 53 million customers with insurance, savings and investment products with total worldwide sales in 2010 of £47.1 billion**.

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* based on gross worldwide premiums at 31 December 2009.

** at 31 December 2010.