Friends and Family Consumers’ Main Source of Financial Advice

A new study by Aviva, the UK’s largest insurance group, has found that 8 in 10 people turn to friends, family and the internet for financial advice. But what about consulting the professionals?

Personal Finance

Calculating budget impact

You respect your friends’ and family’s points of view, and some of them are never short of an opinion. But should you rely on them for financial advice?

Most people do, according to Aviva. A study conducted by the insurance group found that 83% of all consumers go to friends, family and the internet when seeking financial advice.

One of the major factors which determined consumers’ attitude towards financial advice was their age, with younger people relying more on informal advice and the internet and older consumers more likely to seek out professional help.

The research found that 70% of 18-24 year olds go to friends and family for financial advice, while for the over-65s that number dropped to just 24%.

More than half (52%) of 18-24 year olds use the internet to find financial advice, compared to only 23% of over-65s. But 28% of the latter group seek help from an independent financial advisor (IFA), with only 9% of the younger age group doing the same.

Overall, just 1 in 5 said they would go first to an IFA, leading Aviva to conclude that there was a general lack of understanding about what IFAs did, and what they could advise on.

The majority of respondents correctly said that IFAs offered a range of advice from investment and savings to to mortgages and insurance, but weren’t aware that they could do more.

Only a quarter said they believed IFAs could help with managing debt and 15% identified that they could also help with broad financial planning.

Moneyhighstreet says: “A lack of consumer awareness about the benefits of IFAs could be preventing many consumers getting the financial advice they need – especially when it comes to managing their debts in tough financial times.

“If using an IFA is a daunting prospect or beyond your budget, sound financial advice can also be found online.

“Our own website is a good place to start. Our articles cover a range of personal finance topics from debt help right through to high net worth home insurance, giving you great tips to make the most of your finances.”

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