Advisers must address “false impressions” around value for money after a consumer survey found most savers accessing the pension freedoms are unwilling to pay a fee for advice.
Just one in five people would pay for advice when deciding what to do with their pension pot, research carried out by consumer website money.co.uk suggests.
A survey of 669 people aged over 55 found that common reasons for spurning advice included not feeling advice was needed, not being able to afford it and feeling intimidated by advisers.
Of the majority of respondents who said they would not pay for advice, just 20 per cent said they would go to the Pension Wise guidance service instead.
The research found 59 per cent of those polled said they did not need advice, while 28 per cent branded advice a waste of money and 27 per cent said they could not afford to see an adviser.
Some 15 per cent of respondents said they wanted quick access to their money, so they did not want the “hassle” of seeing an adviser.
Of the women asked, one in 10 said they felt intimidated about using an adviser.
The research also suggests although savers do not want to seek advice, only 38 per cent say they fully understand the tax implications of pension pot withdrawals.
For those willing to pay for advice, retirees put the amount they would be prepared to pay at £253 on average.
Money.co.uk editor in chief Hannah Maundrell says: “Given consumers stand to lose a fair whack of their retirement savings to the taxman if they get things wrong, getting help from a decent financial adviser is likely to be worthwhile.
“Our concern is people will rush into a decision without fully researching the long-term impact or costings, simply because they need cash fast.”
The Government is carrying out a wide-ranging review into the advice market, looking into affordability issues and the availability of advice. Final proposals are expected ahead of the 2016 Budget.
Informed Choice managing director Martin Bamford says: “On one hand, the research isn’t too much of a concern because there is still such a large pool of retirees who do want and value advice, that we find ourselves constantly busy keeping up with demand.
“However, clearly as a profession we do not want these perceptions of advice being poor value or even advisers being intimidating. There is a lot of work to do in order to correct some of these false impressions, ensure people recognise the value for money in what we do and feel that advisers are approachable.”
EA Financial Solutions director Minesh Patel says the perceptions revealed by the money.co.uk do not represent the majority of the industry today. However, he warns it could take “over a decade” for these views to be turned around.
He says: “The independent advice sector now demonstrates phenomenally high quality standards, certainly much higher than some similar professions.
“Although the industry has worked very hard to improve perceptions of the value of advice, public perception remains poor and many see advisers as merely a facilitator.
“The idea of pension freedom is brilliant but suitability is often overlooked. Lots of people just want us to help them access their money, and are quite vehement that we should just do what they tell us to do even when it is not in their best interests. But it is up to us as advisers to consider the long term and making sure that money will last.
“Many savers also still believe advisers are simply trying to exploit them for fees, which for the vast majority is incorrect.”
59% – Proportion of people surveyed by money.co.uk who said they do not need retirement advice
28% – Proportion who branded advice a waste of money
£253 – Average fee those who were willing to pay for advice said they would fork out