IFAs are in for a rude awakening as a new survey reveals young
professionals would rather seek advice from friends and relatives than go
to a professional adviser.
The survey, conducted by software company Focus Solutions Group on
financial services and new channels to the market, highlights some
disturbing trends among young professionals aged between 25 and 35.
The company says nearly 29 per cent of respondents would prefer to talk to
a friend or relative for financial advice rather than an IFA while 6 per
cent said they would seek advice from the press rather than a trained
This relatively affluent group is sceptical about the value of talking to IFAs.
Only 5 per cent of respondents believe they would be guaranteed impartial
advice. This is compounded by a belief that IFAs are commission-hungry and
would not put the client's financial needs first.
Focus Solutions says its findings also show financial services companies
are failing to connect with young professionals.
Despite having average annual salaries of £30,000, those surveyed
were shown to save very little, if at all.
Two-thirds, or 63 per cent, find financial products difficult to understand.
Nearly 60 per cent said they would be more interested in them if the
buying process was less complicated and quicker.
However, the survey revealed a distinct resistance to buying more complex
products, including mortgages, via the internet or digital TV.
Focus Solutions Group managing director John Streets says: “While
consumers seem to be slower to wake up to the benefits of doing business
electronically, there is already a small but dis-inct group which is using
the net for accessing some financial products.
“The challenge for the industry is to use the internet not only to achieve
processing efficiencies but also to make product information easier to
access and understand.”