Brits turn to parents for financial advice

Mum’s the word for a growing number of Brits as they turn to family, friends and even their boss for financial advice.
 
More than a year since the Retail Distribution Review (RDR) changed the way we pay for financial advice, people are looking closer to home for financial guidance.
 
A report by financial services provider, NFU Mutual, has revealed that since the January 2013 changes, one in seven Brits making major financial decisions ask a family member1 for advice, with a further one in six opting for the Internet for advice.
 
Furthermore, the number of people looking for financial guidance at work has almost doubled since the new rules came into play, with seven per cent now turning to a boss or colleague for personal finance tips, compared to just four per cent previously.
 
The shift comes as the number of people seeking financial advice from a bank has decreased by more than a third (34%) while the number turning to Independent Financial Advisers (IFAs) has fallen by 14%.
 
Although the RDR aimed to make it very clear how much advice would cost, it is now off-putting for those seeking advice; of those who based their financial decisions on the advice of a non-professional almost one third (30%) said they are deterred by the cost, while one in five (22%) feel the level of fees is unclear6.
 
The findings also identified the perceived value of professional financial advice with respondents willing to pay almost twice as much for a lawyer’s service compared to a financial adviser7.
 
Commenting on the findings, Sean McCann, Chartered Financial Planner at NFU Mutual, said: “In so many families, parents already act as a bank, a taxi service, babysitter and even a relationship counsellor for their children. However, as more people are turning to family for financial advice, it’s unlikely mum and dad will have all the answers.
 
“Although many people see their parents as a source of financial advice, mums and dads may also need some financial guidance as they face their own set of changing circumstances.
 
“As with everything you buy: price is what you pay and value is what you get. The right advice is just as important when you take money out of pensions and investments as when you’re deciding when and where to invest. Getting those critical decisions right can make thousands of pounds worth of difference.
 
“Wise words from the people you trust will often take you far in life, but expert, qualified advice can make a real difference to your family wealth.”