Britons at risk from lack of advice
Danger of lack of financial advice
Tuesday, 13, Jan 2009 10:33
Millions of Britons are at risk from the wrong insurance cover, financial advisors have warned.
Over ten million people in the UK could have unsuitable protection after failing to update their policies following a life-stage event such as buying a house, changing jobs or starting a family, according to Barclays Financial Planning.
David Stuart, director of advice and products at Barclays Financial Planning, said: "It's a worrying statistic that over ten million people could have the wrong cover when they think they are protected.
"Perhaps part of the problem is that people aren't often fully aware of what need and what sum their protection products cover in the first place, especially when they buy without advice."
Nearly 40 per cent of people that have taken out protection policies did so without receiving advice from a professional, and 13 per cent did not know whether they had taken advice at all, a survey carried out by Barclays found.
Nearly three quarters of policy holders (73 per cent) do not know how much they are insured for or what they would receive if they needed to make a claim, Barclays added.
The research also found that 33 per cent of people prefer to take their financial advice from friends, family or their partner rather than speaking to a professional, indicating the problem may be one of trust.
However, independent financial advisor (IFA) search site Unbiased.co.uk has published its own survey showing trust in IFAs is at an all-time high, with almost nine out of ten people who have seen an IFA saying they would visit the same person again.
"The number one source of enquiries is referrals from friends and relatives of existing clients," said David Elms, chief executive of Unbiased.co.uk.
"The second most important point for referral is now the web. Unbiased.co.uk helps half a million people a year to find an IFA."