More people turn to Mum and Dad for financial advice

The Momentum UK Team 30 April 2014

People are increasingly turning to parents and colleagues for advice on important financial decisions, according to a recent survey.

The research, from NFU Mutual, looked into the way behaviour has changed since the Retail Distribution Review (RDR) in January last year, which changed the way advisers charge for their services.

According to the research, the number of people seeking financial advice from a boss or colleague has almost doubled since the RDR, with 7% of us now doing so compared to just 4% previously. One in seven of us now ask our parents for financial advice, with a further 1 in 6 asking the internet.

In the same time period, the number of people seeking financial advice from a bank has decreased by more than a third (34%) and the number turning to independent financial advisers has fallen by 14%. Of those who choose to base their financial decisions on advice from non-professionals, 30% said they are deterred by cost, while 1 in 5 (22%) feel that the level of fees is unclear. Interestingly, it was revealed that people were willing to pay almost twice as much for the services of a lawyer as they were for a financial adviser.

Sean McCann, a Chartered Financial Planner at NFU Mutual, commented on the research:

“In so many families, parents already act as a bank, a taxi service, babysitter and even a relationship counsellor for their children. However, as more people are turning to family for financial advice, it’s unlikely mum and dad will have all the answers.

“Although many people see their parents as a source of financial advice, mums and dads may also need some financial guidance as they face their own set of changing circumstances.

“Wise words from the people you trust will often take you far in life, but expert, qualified advice can make a real difference to your family wealth.”