New research conducted by NMG for the Association of Professional Financial Advisers (APFA) has highlighted the urgent need for significant policy measures to boost access to affordable financial advice.
In a recent survey of advisers, nearly 7 in 10 advisers (69 per cent) said they had turned away potential clients over the last 12 months, an increase from the 6 in 10 (61 per cent) in 2014 and 5 in 10 (54 per cent) in 2013.
The most common reason was affordability, with 43 per cent stating that the advice services they offered were not economic based on the client’s needs and circumstances. The survey also indicated of those advisers who had done so, 72 per cent had turned away clients who were seeking help with their pensions and that each adviser turned down an average of 3 clients in 2015. If taken across the industry as a whole, this suggests that nearly 70,000 clients were turned away over the last year.
Chris Hannant (pictured), Director General of APFA, says: “This survey clearly highlights one aspect of the advice gap – where those who want financial advice are unable to afford it. It is concerning that nearly 7 in 10 advisers feel they need to turn away clients because they think it would be disproportionately expensive for the client to access professional financial help; research shows that taking advice is invaluable in helping people make the best long-term decisions for their financial future.
“It is also clear that the government changes to pensions policy have had an impact on the kind of advice consumers are seeking. Unfortunately, the high cost of regulation in turn leads to higher fees, restricting access to advice to the wealthiest. The government must use the Financial Advice Market Review as an opportunity to undertake the serious reforms to financial advice regulation that are urgently required, including a wholesale restructuring of the funding of the FSCS and the new initiative to apply “Better Regulation” principles to financial services.”