While the Covid-19 pandemic has had a significant impact on people’s finances, few have relied more on a financial adviser or wealth manager over the last 12 months in comparison to previous years, our new research reveals¹.
Considering that 41% of adults have been more worried about their finances in the latest lockdown compared to the first, the proportion of those relying on expert advice is relatively low.
Notably, 25% of those with previous investment experience relied more on an adviser during this period, compared to just 7% of those who haven’t invested in the past. This raises concerns that the financial divide between these cohorts is set to worsen, with experienced investors benefiting from expert guidance. Meanwhile, those who aren’t using the available support fall further behind.
Men were also more inclined to leverage adviser support throughout this time compared to their female counterparts, with 18% relying on expert advice in comparison to 12% of women. This outcome further exacerbates the growing financial inequalities between genders.
While older cohorts have traditionally relied more on IFAs in comparison to their younger peers, the findings revealed that over the past 12 months specifically, those aged 35-44 were more likely to rely on an adviser, with 27% seeking financial advice compared to only 5% of those over 65. This may be attributed to the disproportionate effect the pandemic has had on the finances of younger cohorts, triggering an unprecedented shift in their responses and financial attitudes.
Percentage of those who have relied on a financial adviser/wealth manager more during the pandemic compared to previous years:
Source: Censuswide, Netwealth.
A more independent approach could lead to difficulties
Despite the lack of engagement with advisers, 40% of British people have been more engaged with their personal finances throughout the pandemic. This includes reassessing the value of existing products and providers and potentially switching in search of a better deal.
An additional 24% made changes to their retirement plan over the last 12 months, suggesting that many have been making significant long-term decisions independently, without seeking expert advice despite the complex financial environment.
“The pandemic has had an impact on the finances of most across the UK,” says Netwealth CEO Charlotte Ransom. “So it is surprising to see such low levels of engagement with financial advisers and wealth managers who can provide much-needed support in navigating significant pressures during this complex period.”
“The financial difficulties of women in particular have been exacerbated throughout the pandemic, increasing an already significant gap when compared to their male counterparts. This makes it even more essential that women are using the available financial advice and wealth management expertise to help rectify these imbalances.”
“While many may be focused on the immediate impact of the pandemic, people need to think about the longer-term implications – before it is too late. Overcoming the block that many may have towards seeking advice will be a key challenge for the industry to overcome.”
“Encouraging people to take their financial futures into their own hands and set up a flexible life plan to help achieve their goals will be vital to ensure people come out of the pandemic stronger and more financially resilient than before.”
To help you embed resilience into your financial future, these modern planning tools can help you to model for different scenarios and adapt if need be. And if you need more specific direction and advice, please get in touch.
Please note, the value of your investments can go down as well as up.
¹ Research conducted by Censuswide between 12.02.2021 and 16.02.2021. The survey reached 2,041 UK adults aged 35 and over.