Financial Mis-Selling: Why 57% of Britons do not Trust Financial Advisors
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Working with a good independent financial advisor offers multiple benefits. They’ll help you to maximise your wealth, and gain greater financial security for the future.
However, recent research reveals that the majority of people in this country don’t trust IFAs. Here’s a closer look at the statistics, and the reasons why there’s so much negativity surrounding the financial advice sector right now.
Financial advisors – a lack of trust in the industry
A recent study carried out by My Pension Expert revealed that 57% of British people don’t trust financial advisors. This figure was even higher among the over-55s – with 65% in this age bracket stating that they distrusted IFAs.
Just 38% of the people questioned had received advice from an IFA in the past. By contrast, 65% of the respondents said they preferred to use free advice services online, and 76% claimed they felt happy making financial decisions without any professional help.
Why do people feel like this?
My Pension Expert also asked the respondents why they’d formed such negative views of financial advisors.
Over a quarter of the people claimed their IFA had pressured them into investing into a financial product, without fully explaining the details. More worryingly, 13% said that they’d lost money as a result of following their financial advisor’s recommendations.
Expense was also cited as a major reason, with three-quarters of people stating that advisor fees were too costly.
The industry’s response
Understandably, the results of the survey are concerning, though, as one expert highlights: “A few bad advisors or experiences can taint the sector”.
Andrew Megson, My Pension Expert’s executive chairman, said that “the lack of trust in independent financial advisors is alarming.” He added that “poor past experiences, heavy-handed sales tactics, complicated fee structures and unnecessary jargon are all making people turn their backs on IFAs.”
Of course, many financial advisors operate with integrity and transparency. It’s just the few unscrupulous IFAs that are letting down the entire sector.
What does this mean for the future?
The FCA is increasingly cracking down on problematic IFA practices, and the media now regularly reports on high-profile mis-selling cases. Hopefully, this may reduce instances of mis-sold investments and mis-sold pensions in the future.
The big question is - what should you do if you’ve been mis-sold a financial product in the past? And what exactly constitutes mis-selling?
Here are a few common signs that you’ve been mis-sold to:
- You were pressurised into purchasing the financial product
- The product wasn’t explained properly to you
- Your advisor didn’t assess your attitude to risk
- Your advisor didn’t explain the risk-level of the financial product
- You weren’t offered a full range of options
- Your specific circumstances weren’t taken into consideration
If any of these scenarios sound familiar, you might be eligible to receive compensation for your financial losses. To find out more about making a claim, get in touch with the Goodwin Barrett team today, by calling 0808 163 1659 today or email enquiries@goodwinbarrett.co.uk.
References
https://ifamagazine.com/article/britons-do-not-trust-financial-advisers/
