More financial education is needed - Openwork

Most clients willing to pay for financial advice

More financial education is needed - Openwork
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Two thirds of advisers believe more emphasis should be placed on financial education in schools

Financial advisers believe government, schools and the financial services industry should do more to highlight the value of advice because clients are willing to pay for it, research by Openwork has suggested.

Meanwhile, another study by the network has revealed advisers are seeing a surge in demand for inheritance tax (IHT) advice.

According to Openwork's research, 65% of clients are willing to pay for advice when provided with an explanation, while 38% are happy to pay without any explanation. Just 3% of advisers said they regularly lose clients over fees.

However, the study of 115 found that 65% of financial advisers said more should be done to bring attention to its value, through financial education in secondary schools.

Almost half (47%) feel that a government-backed campaign targeting working adults would help, while four in 10 adviser said employers should do more to highlight financial advice and guidance in the workplace.

Over half of advisers surveyed (51%) said financial services trade bodies such as PIMFA and the Association of British Insurers (ABI) should invest more in promoting the benefits of advice, over and above what is offered by other organisations such as the Money and Pensions Service (MAPs).

'More needs to be done'

PIMFA CEO, Liz Field said: "We welcome the findings of the Openwork research that add to the ever-growing body of evidence to highlight the important role of our sector and the true value of advice it provides to individuals and families as they plan for their personal financial futures.

"Advice from qualified financial professionals is proven to lead to better financial outcomes across all segments of society. It is all our responsibility to ensure that people are provided with the best information, guidance and access to advice to ensure they are empowered to make important decisions about their futures and safeguard their financial and mental wellbeing."

Mike Morrow, Openwork's wealth & platform director, added: "It is clear from this research that advisers believe much more needs to be done by schools, trade bodies, employers and the government to promote the value of financial advice.

"Although we live in challenging and uncertain times, with long term impacts of covid-19 on society and the economy still unknown, it remains important people understand the benefits of financial advice as well as the different types of services and products out there to support their long term financial wellbeing.

"More now than ever, we should all be working together to promote the value of advice to people. People will be facing unprecedented financial challenges bought about by covid-19, with many now having questions or concerns about their own financial situation and unsure where or who to turn to for help."

IHT ‘confusion'

In a separate study, Openwork also found that more than half (52%) of over-45s are worried about their families being hit by IHT bills, while more than a third (37%) of advisers have seen a rise inquiries about IHT over the past year.

The research, which surveyed 1,151 UK adults alongside 115 financial advisers, also showed that there is confusion around IHT.

One in three consumers (31%) plan to make gifts of more than £5000 to children and grandchildren in the next five years but worry about getting it wrong.

Just 15% of homeowners aged 45-plus said they have taken specific advice on minimising IHT bills, rising to 17% among over-65s, despite concerns about inheritance costs in the future.

According to Openwork, the findings are yet more evidence of the value of financial advice and more attention should be drawn to it.

Mike Morrow said: "Many people are still anxious about inheritance tax, which can often seem unfair when you are looking to pass your estate to your children and grandchildren, to ensure their long-term financial security. 

"The growth in UK house prices over the last 30 years means many more people on middle incomes could face unexpected and large tax bills if they try to pass on their home to their children or grandchildren.

"The upcoming Autumn Budget is expected to include changes to IHT rules which could look to capture even more wealth, increasing concerns among people.  It is therefore more important than ever that individuals seek support from a qualified financial adviser. However, with only one third having taken action, it is evident that the profession needs to much more to promote its benefits to people so that they know what support is available."

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