With that in mind, RateSetter commissioned research to find out where people in the UK get their financial advice from. We surveyed 2,000 people of all ages and backgrounds across the UK, and asked them a few simple questions about the approach they took to their finances.
Friends and family trump the professionals
One of the most striking findings is that we’re far more likely to go to family for financial advice than to a professional, qualified independent financial advisor. Four in ten people (38%) have gone to another family member for advice about money, while only one quarter (25%) have used a professional adviser.
However, almost half of people (47 per cent) have never sought financial advice, preferring instead to do their own research.
The young helping the old
Traditionally, parents provide advice to their children about opening savings accounts, taking out a mortgage and other financial issues, but the research uncovered an interesting phenomenon: a quarter (26 per cent) of under 35s have provided advice to their parents, and one in ten over 55s have asked their adult children for financial advice.
Where to turn
So where should you go for financial advice? It’s easy to see why we approach family members for guidance – they’re trusted, have your best interests at heart and of course the advice is free. However, they may not have detailed financial knowledge, and what worked for them might not work for you. For example, your parents might have bought a property several years ago and seen it increase in value, but there is no guarantee that a property you buy today will do the same.
Fortunately, there has never been more information available online – all that is required is a little patience, and websites such as Money Saving Expert and the myriad of comparison websites have empowered millions of people to make better financial decisions, independently.
However, for the big decisions, many people will prefer to seek advice from a qualified independent financial advisor, and good financial advice can pay for itself many times over.
Lucy Bott, Head of Customer Operations at RateSetter, commented:
“We’ve heard how millennials are tapping the ‘bank of mum and dad’ for things like a deposit to buy a house, and this research shows that parents and grandparents are important and trusted sources of financial advice too. Perhaps more surprising is that many parents are now turning the tables, seeking advice from their grown up children.
The key thing is to keep your finances under review – and with interest rates recently cut even closer to zero, it is all the more important not to bury your head in the sand and hope for the best. Putting money to work now can help turn dreams for the future into reality.”
You can listen to Lucy speaking about this on the radio with personal finance expert Simon Read here.