Exploring the barriers to accessing personal financial planning advice

TY - JOUR

T1 - Exploring the barriers to accessing personal financial planning advice

AU - Moss, John

AU - Rowlingson, Karen

AU - Lymer, Andrew

N1 - © 2022, The Author(s), under exclusive licence to Springer Nature Limited. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details

PY - 2022/9/20

Y1 - 2022/9/20

N2 - Shifts in welfare policy over the last forty years towards a greater neo-liberal stance have resulted in citizens needing to take greater responsibility for their finances (Rowlingson 2000; Strauss 2008; Sherraden and Ansong 2016). This coupled with low levels of financial capability across the UK population and consumers trying to make informed decisions from this low knowledge base (Sandler 2002; FSA 2004, 2006; Thoreson 2007, 2008; Arthur 2016; Stillwell 2016) suggests a growing need to understand the barriers that consumers face regarding access to financial advice. This paper argues that barriers preventing access to financial advice are not yet adequately understood. To build understanding three variables are explored, namely knowledge, trust and affordability/cost that are shown to affect consumers’ ability to access regulated financial advice. From these variables emerged the ideas that financial advice needed to be considered the ‘subjective norm’ and that ‘trust heuristics’, as a route to advice had certain embedded risks. As part of the research process a ‘Financial Advice Belief Model’ was developed as a tool to explore these variables more deeply and help interested stakeholders better understand factors that create barriers and may prevent consumers from seeking effective financial advice. Addressing these factors, we use the case of the UK to illustrate possible ways forward and argue that the findings could apply in other developed country settings. Further, these three key variables affecting access to needed financial services should be a key consideration for the UK’s Money and Pensions Service as it looks to develop a wider focus on financial well-being as the core of its strategy for UK citizens in need of financial guidance.

AB - Shifts in welfare policy over the last forty years towards a greater neo-liberal stance have resulted in citizens needing to take greater responsibility for their finances (Rowlingson 2000; Strauss 2008; Sherraden and Ansong 2016). This coupled with low levels of financial capability across the UK population and consumers trying to make informed decisions from this low knowledge base (Sandler 2002; FSA 2004, 2006; Thoreson 2007, 2008; Arthur 2016; Stillwell 2016) suggests a growing need to understand the barriers that consumers face regarding access to financial advice. This paper argues that barriers preventing access to financial advice are not yet adequately understood. To build understanding three variables are explored, namely knowledge, trust and affordability/cost that are shown to affect consumers’ ability to access regulated financial advice. From these variables emerged the ideas that financial advice needed to be considered the ‘subjective norm’ and that ‘trust heuristics’, as a route to advice had certain embedded risks. As part of the research process a ‘Financial Advice Belief Model’ was developed as a tool to explore these variables more deeply and help interested stakeholders better understand factors that create barriers and may prevent consumers from seeking effective financial advice. Addressing these factors, we use the case of the UK to illustrate possible ways forward and argue that the findings could apply in other developed country settings. Further, these three key variables affecting access to needed financial services should be a key consideration for the UK’s Money and Pensions Service as it looks to develop a wider focus on financial well-being as the core of its strategy for UK citizens in need of financial guidance.

KW - Bounded rationality

KW - Financial advice belief model

KW - Heuristic

KW - Holistic financial advice

KW - Personal finance

KW - Trust

KW - Welfare

UR - http://www.scopus.com/inward/record.url?scp=85138551302&partnerID=8YFLogxK

U2 - 10.1057/s41264-022-00180-x

DO - 10.1057/s41264-022-00180-x

M3 - Article

AN - SCOPUS:85138551302

SN - 1363-0539

JO - Journal of Financial Services Marketing

JF - Journal of Financial Services Marketing

ER -