More than five million people who currently do not receive financial advice would take it if it was cheaper, according to a report by Citizens Advice.
Some 5.4 million people are willing to seek out and pay for regulated advice but are not prepared to meet current prices, the report, entitled The Four Advice Gaps, concluded.
Citizens Advice said the notion of the ‘advice gap' - popularised by the government and several industry stakeholders following the introductions of both the Retail Distribution Review (RDR) in 2012 and the pension reforms earlier this year - should be broadened.
Citizens Advice identified four advice gaps which it said should not be combined to form a definitive advice gap, as some people would straddle more than one group.
They are the ‘affordable advice gap'; the ‘free advice gap'; the ‘awareness and referral gap'; and the ‘preventative advice gap'.
Citizens Advice said: "There is not a single advice gap, affecting those who want advice but can't afford it. There are a series of gaps which lead to a range of people missing out on the benefits of money advice and the security that it affords."
The affordable advice gap refers to the "most widely recognised" gap apparently caused or widened by the unintended consequences of the RDR, which among other changes removed commission on new investment sales and replaced it with a mandatory - and pre-agreed - adviser charge.
According to the report, while 20% would consider paying for advice when making an investment, just 6% would pay £500 or more for simple investment advice, which Citizens Advice identified as a threshold figure based on findings by Unbiased.
The Four Advice Gaps report was based on responses from more than 2,000 individuals and "scaled up" based on the 2011 population total of 48.3 million.
The Four Advice Gaps
The affordable advice gap affects consumers who are willing to pay for advice but not at current prices. According to Citizens Advice research, up to 5.4 million extra people would consider paying for advice if it cost less.
The free advice gap affects people who want advice but who are unable to pay for it. Citizens Advice said up to 14.5 million people who think they would benefit from free advice haven't taken any in the past two years. This includes some 735,000 people who have apparently tried to access free advice but have been unable to due to a lack of supply.
The awareness and referral gap affects people who are not aware that advice exists, or where to get that advice. As many as ten million people who think they would benefit from free advice are not aware of public financial guidance, according to the Citizens Advice report.
The preventative advice gap affects those who need financial guidance at key points in their lives, but do not take it because it is not marketed properly, or do not get the required breadth of help they need when they do.