More choice always will always mean more complications. And while this is not intrinsically a bad thing, individuals would do well to seek guidance when it comes to accessing a wider range of choices than they would realistically be able to assess on their own.
On the other side of the scale entirely, we are now living at a time where individuals can access a vast amount of information on the internet and where everybody can become their own financial adviser, for better or for worse.
To this end, almost two thirds (65 per cent) of UK adults said that they preferred to rely solely on online advice, according to the aforementioned My Pension Expert survey.
This is troubling. Obviously, in some cases, savers will have a firm grasp of their finances and will be able to make complex decisions about how to proceed, even in times of economic instability.
However, the vast amount of unreliable, inaccurate and potentially nefarious online content outweighs the potential benefits of relying on self-governed advice.
Harnessed with a false sense of confidence when it comes to choosing their products, consumers might find themselves worse-off in the long-term.
Particularly at the current moment, where individuals might have been prompted to dip into their retirement savings to make ends meet without necessarily understanding the long-term consequences of doing so, there is clearly a pressing need for advice.
This begs the question – why are individuals so reluctant to take it?
Mistrust begins with incentives
Ultimately, the question begins and ends with the issue of trust, and this stems from a history of pushy sales tactics and incentive-driven advisers only interested in closing a deal.
Prior to 2012, there was no transparency surrounding adviser fees. This meant that it was unclear how adviser fees were calculated and worse still, allowed some advisers to receive commission for recommending that clients purchase certain products that did not suit their needs.
As such, in the past individuals might have found themselves experiencing somewhat aggressive sales tactics from an IFA working on commission.
Indeed, My Pension Expert’s aforementioned research revealed that over a quarter (26 per cent) of UK adults have felt forced into purchasing a financial product, despite not fully understanding what it was.
Of course, this is no longer the case, since the FCA cracked down on such incentives in 2012 under the retail distribution review.
Nowadays, although IFAs can only offer fee-based advice and operate without commission, this is not to say that the past actions of advisers have gone unnoticed.
In spite of regulatory changes, it is clear that the damage has already been done, and that Britons remain unwavering in their mistrust of advisers – especially as many continue to be unclear about how fees are calculated or may be wrongly under the impression that commission structures still exist.
