Many investors and savers seek help with financial decisions and are using the internet more, survey reveals

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Written by Ray Clancy

Friday, 30 April 2010 08:31

Three quarters of British savers and investors claim to make financial decisions on their own but many still look for help when buying a product and rely on the internet more than ever, a new survey reveals.

Brits are more willing to pay fees for financial advice than Belgians but less willing than investors in Germany but their understanding of what fees are being levied and how they are used is poor, the Fidelity International research shows.

The survey of 9,000 savers in 11 countries, showed more than half of British savers and investors, 64%, were most influenced by industry professionals, family and friends or the media when they last bought a financial product.

The number who went to see a professional, either an independent financial adviser or bank/insurance company agent, was 40% and lower than in other countries such as France (59%), Denmark (55%) and Italy (53%). But at 15% more British people based their decision on a product provider website than in any other country.

Tom Stevenson, Investment Director at Fidelity International, said the survey highlighted the fact that savers and investors are looking for help from a range of sources when it comes to making decisions about their finances.

'What is clear is that savers want to access to different types of help, ranging from full independent advice to simple guidance for more-self directed investors. The Retail Distribution Review is putting the spotlight on independent financial advice but this is not the only place that people are seeking help to make their financial decisions. The web is increasing in its significance as more people look for information online and this demand for web-based information is only set grow,’ he explained.

In terms of those who seek advice, there was a clear divide in terms of age group, with those over 35 almost twice as likely to visit an independent financial adviser as their younger counterparts. Just 9.4% of investors under 35 said they sought advice from an IFA, compared to 17.1% of those aged over 35.

The survey also looked at adviser fees and found only 46% would be willing to pay fees based on an advisers’ time. This is despite the Retail Distribution Review in the UK seeking to ban commission based advice models when it comes into force in 2012, suggesting more work needs to be done to convince investors of the benefits of paying a fee for financial advice.

‘The industry as a whole needs to convince savers of the value of advice, that it is worth paying for and that there are a number of options available to them. Many of those people who are put off by an upfront fee may not realise there are alternatives, such as agreeing an ongoing fee with their adviser,’ said Stevenson.

‘For those that choose not to access independent financial advice, we need to ensure they are able to access information that is simple, transparent and offers a manageable level of choice,’ he added.

Choice is a key consideration for UK investors, with almost 79% saying it is fairly or very important to be offered a range of products from different providers. However, they also wish to be offered an optimised range that is not over-complicated, with 37% saying they do not wish to become involved in a choice that is too complex.

‘Savings in the UK are at an all-time low, partly as a consequence of a lack of confidence and trust among investors in financial services. More needs to be done to ensure consumers’ interests are at the forefront of future regulatory policy, that there is fairer and more open access to products and advice and that a culture of long term savings is encouraged and facilitated,’ said Stevenson.