With the perception gap between the advised and non-advised posing the biggest problem
Nearly three quarters (74%) of surveyed financial advisers believe the advice gap is their problem, the Scottish Widows Investor Confidence Barometer has revealed.
With nearly half (44%) believing that advisers themselves play the largest role in shrinking the gap.
A further one-in-five (20%) believe that technology, including Artificial Intelligence (AI) can shrink this gap.
The access gap for investors with sub-£50k portfolios has historically been limited.
However, Scottish Widows found that over two in three (68%) of advisers provide ‘specific proposition’ for investors with smaller portfolios.
As the majority of surveyed advisers believed that retail bank D2C propositions for these portfolios helped introduce consumers to investing.
For non-advised investors with £100,000 plus portfolios, the cost and value of financial advice are the main barriers.
Some 40% said that high costs put them off seeking financial advice while 28% are not convinced advice would save them any money.
In response, 87% of surveyed advisers believe they add between 2.1% and 4% in value per annum to clients’ portfolios.
As confirmed by 80% of advised clients who believe the advice they receive is good value for money.
Suggesting that there is perception gap between the advised and non-advised meaning that advisers must influence the non-advised by make advice more affordable and communicate its value more efficiently.
To read more on this topic, visit: 25% of Brits would not take financial advice even if it was free
Head of intermediary sales at Scottish Widows Jamie Drewett, said: “The advice gap is a particularly pressing issue in times of high inflation, when some investors with lower-value portfolios are at risk of seeing their predominantly cash-based savings slowly erode in value.
“It’s great to see advisers stepping up to the challenge by building out lower-value portfolio propositions.
“The latest evidence from our survey supports the view that advice is demonstrably valuable and advised client satisfaction remains high.
“However, there is a perception gap around value with some non-advised investors, and we’re looking at ways of supporting our advisers in championing the value of advice to bridge that gap.”
