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Consumers brand investment advice pointless below £25,000

HSBC-700x450.jpgNearly half of savers with at least £15,000 to their name believe there is no need to use an investment adviser until that have more than £25,000.

A survey of more than 8,000 adults, a quarter of which had £15,000 in savings, conducted on behalf of HSBC shows that savers are more likely to turn to the internet, the media, or family members for help with where to invest their money.

More than half of those with at least £15,000 set aside said they had never sought advice from a professional IFA. 49 per cent said they would turn to the internet. 9 per cent said they did not know how to get started.

HSBC head of UK Premier and Wealth Insight Michelle Andrews said:  “A lot of people don’t consider themselves wealthy and the very term can put people off…Our research told us that a lot of people don’t have time to consider wealth management. However investment advice doesn’t have to take hours – you can contact advisors over the phone at a time that works for you if a face to face meeting doesn’t work for your schedule.”

HSBC announced in June it would roll out an online advice service for those with less than £15,000.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Christopher Pitt 14th August 2017 at 3:24 pm

    Interesting research – if not that surprising! I suspect that if a similar survey was done among financial advisers they would produce a very similar result, i.e. that they don’t think it’s worth providing financial advice to clients with less than £25k to invest; In fact, I think the figure might be quite a bit higher than £25k! But that doesn’t mean we should ignore those clients with less to invest; If anything they need more help. So, surely the answer has to be to find a way of delivering tangible support to those with smaller pots at a much lower price-point and in a much more engaging way.

  2. What about ‘capacity for loss’? If all they have is £25,000 or less, they should put it into the best ‘safe’ interest return bank account. E.g. 1-2-3 account with cash back.

  3. Whilst the ethics and cohort be not be great I actually agree. Unless one is investing on the drip in low cost, well diversified assets, where’s the value in paying someone like me hundreds if not into the thousands.

    Go back to basics, calculate protection needs, create a reserve account, build up your retirement savings and use a planner when things get more technical or complex. Wouldn’t suggest going to a post financial crisis reeling bank for proper advice however.

  4. Blinker’d research ?

    I have never come across any-one who does not need financial advice in one way or another … from the millionaires to the bread line

    Investment is a one trick pony, lots of other areas to consider, and of higher importance, like -: protection, pension, savings ……

    The industry should be shouting at these people, because “what” have they sacrificed to squirrel away this much money and to what detriment…… don,t leave it to the man in the pub or the inter-web, we all know his hard earned money will be invested (stolen) in rubber dog s41t or a mud hut in Nigeria.

  5. Any young-ish person who’s managed to accumulate £15,000 or so in savings is absolutely ripe for and is quite misguided in assuming that there’s no value to be wrought from paying for advice on how to build on such a sum.

    I was recently introduced by an existing client to his nephew who’s in his mid-thirties. Despite (with his partner) having plenty of spare income, all he has is (almost exactly, as it happens) £15,000 in a cash ISA earning virtually no interest. No protection (his 10 year old daughter lives with him), no mortgage protection, no income protection (he’s self employed), no retirement savings plan, no ISA (with the potential for earning considerable more than cash).

    Anyone in that position who believes they either don’t need proper advice or can get it from their friends/family/bloke down the pub is about as deluded as it’s possible to be.

    What surveys such as this reveal, above all else, are a woeful lack of awareness amongst the general populace of the importance of Personal Financial Planning. Hence PFP (or Home Economics) should be a key element of the national education curriculum.

  6. I think there is a lot of truth in this. Sure they may just be the odd exception (as there always is) but by and large I think the survey reflects an accurate view and as has already been noted I guess many advisers would come to the same conclusion.

    • My point, Harry, is that anyone (still earning) with not much more than £15,000 to their name would probably do well to pay for advice on how to build upon such a modest sum. Doing nothing is hardly a sensible option and, with no experience, trying to DIY may well not be much better.

      Good advice on just an ISA or a Retirement Savings Plan can’t be provided for peanuts but, within a simple set of circumstances, it need not be expensive. Other than those driven by sales targets, more and more advisers these days take the long view rather than seeking to make a quick buck at the start of what they hope will be a long term client relationship.

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