Most UK adults don’t seek regulated financial advice, believing it to be “too expensive” and “for the wealthy”

by | Feb 1, 2023

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New research from the Financial Services Compensation Scheme (FSCS) reveals that almost two-thirds (64%) of UK adults with savings, investments or a mortgage have not sought regulated financial advice in the last five years.

More than one in five of those who obtained free guidance rather than regulated advice said they did so because they believed the service was “too expensive”.[2] More than half (55%) of those with any financial products think that “paying for financial advice is for the wealthy”.

Young people between the ages of 18 and 34 were most likely to agree that it should be easy to invest without needing professional financial advice. More than half of UK millennials (60%) and Gen-Z (57%) with financial products agree they can find good financial advice online, and almost half (44%) of Gen-Z believe they can source good financial advice on social media.[3]

With investments, pensions and cryptocurrency scams on the rise, as fraudsters seek to take advantage of the cost-of-living crisis, FSCS’s new research suggests there is a greater need for consumers to understand the difference between regulated advice and guidance, and what to expect from each. This will help consumers feel more confident about getting help and making responsible decisions about their money. 


Not seeking regulated advice, or following guidance from unregulated and unsuitable sources, could put UK adults at higher risk of putting their money somewhere that isn’t safe. This is a pertinent issue for FSCS as consumers may only be eligible for compensation for poor financial advice if they are dealing with a firm that is authorised by the FCA. 

Yet, encouragingly, the new findings also show that among those UK adults that have taken paid for regulated financial advice, 62% said that if they needed financial advice for a similar reason, they would use the same service from the provider they used before.

Additional findings from the study include:


·        Across the various regions in the UK, adults with savings, investments or a mortgage living in Greater London had been the most likely to seek financial advice in the last five years – with 49% of them saying they did so. This was followed by South England (38%), Scotland (36%), North England (34%), and Wales (33%). Adults living in the Midlands were the least likely to seek financial advice (31%).

·        When asked if there were any circumstances in which they would pay for regulated advice the most common answer, among those UK adults with savings, investments, or a mortgage, was after receiving a lump sum of money (e.g., inheritance, bonus, insurance pay out).

Caroline Rainbird, Chief Executive of FSCS, said: “The financial ‘advice gap’ is a concern for FSCS, particularly as scammers will prey on peoples’ fears and exploit any gaps in their financial knowledge, putting them at greater risk of making poor decisions about their money. 


“Our latest research shows that consumers are looking for easy ways to invest, whilst also getting the right support. The FCA’s Consumer Investments Strategy looks to make advice on mainstream investments more accessible and affordable to everyone, which is something we welcome.” 

“At FSCS we see the impact of poor advice every day. It results in millions of pounds each year disappearing from consumers’ pockets. We can only offer protection on financial products and services that are regulated, and we encourage consumers to check if they are likely to have access to FSCS protection if something goes wrong. 

“It is important for people to be fully aware and confident about the decisions they are making with their money and the risks that come with taking guidance from unauthorised sources.”


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