Investment, pensions and protection products leave up to five out of 10 adults confused, a research from Defaqto reveals.
The firm says around 38% of people claim to understand investment, pension and protection products well while more are confused by the range of choices offered them, which for investments alone include around 1,600 unit trust and OEIC funds.
The lack of understanding is prompting a rush to independent financial advisers, Defaqto claims with some 6.2m people planning to visit an IFA over the next 12 months. But while the benefit of seeking independent advice appears to be understood by consumers there is a split between how much and in what way consumers are willing to pay.
Defaqto claims more than 2.1m people have paid a fee for independent financial advice over the last two years while another 2.9m have paid fees more than two years ago.
But another 7.6m people have seen an IFA and not paid directly for the advice instead paying commission on products they have purchased on the adviser’s recommendation.
Defaqto sales and marketing director, Neil Morgan, says: "Increasingly we all need to take responsibility for our own finances and need to understand pensions, investment and protection products. However it is clear that many people do not understand these crucial financial products which are important in securing a comfortable retirement, funding day-to-day living and protecting ourselves and our families if the worst happens.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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