We all know the power of financial advice. It helps millions of people realise their goals and achieve long-term financial security.
Yet it is also well documented that a growing number of people across the UK find themselves in an “advice gap”, missing out on the significant benefits that expert financial guidance can offer.
It begs the question: how can advisers broaden access to advice and help more people enjoy its benefits, while at the same time making the most of the business opportunity to secure a successful, profitable future for their firm?
The Advice Map of Britain: a valuable insight
To gain a deeper understanding of the individuals who fall within the advice gap, and to identify the steps needed to close it, we have created an “Advice Map of Britain”.
As a dominant player in adviser practice management systems, with a market share of 52 per cent according to NextWealth, we were able to review data from 3mn advised clients to uncover who is taking advice – and more importantly, who is not.
Our analysis revealed persistent disparities in access to financial advice. Key factors impacting an individual's likelihood to seek advice include gender, age, relationship status and geographic location.
Gender inequality
Simply being a man makes it more likely that you will seek financial advice.
According to our data, half of advised clients are male and two-fifths (43 per cent) female – the gender of the remaining 7 per cent is not specified. Northern Ireland has the widest gender advice gap, with 43 per cent female clients versus 54 per cent male, while London boasts the narrowest gap at 47 per cent female and 50 per cent male.
The gender pay gap, resulting in women having less spare money to put away for their future, is likely to be a factor in fewer people taking advice. However, risk aversion could also play a part. HM Revenue & Customs Isa subscription figures show that women who do have money are more likely to save than invest.
In 2019-20 81 per cent of women chose a cash Isa, 15 per cent a stocks and shares Isa and 4 per cent both, compared with 71 per cent, 22 per cent and 6 per cent of men respectively.
By investing less, many women have less opportunity to grow their money, compounding wealth inequalities. Bringing more women into advice is crucial to their long-term financial security.
Generational disparity
Alongside the gender imbalance, our Advice Map also uncovers a significant age bias, with two-thirds (68 per cent) of advised clients over the age of 50, and 14 per cent in their 40s, while just 4 per cent are under 30.
There is evidence that this demographic is more disengaged with their finances. Royal London’s advice gap research found that 44 per cent of 18 to 34-year-olds have little awareness of their own financial situation, and seeking advice is not something they have thought about.
