Coming clean about advice and guidance

Mark Polson | Supplied

There is great joy in being helped by someone who knows what they’re doing. Equally, when you’ve put yourself out there and deferred to an “expert”, there’s nothing more frustrating than not getting answers.

I know it’s not healthy to feel rage, but I had to buy a new dishwasher a while back – stick with me, it gets better –and so headed for a certain large electrical retailer for a poke around. And, of course, a young man with directional hair hoved into view, and for once I thought why not, I’m here to sort it out, so let’s get it done. I said yes, and told him I was looking for a recommendation on which dishwasher to get, budget ideally just this side of preposterous.

And you could tell it was coming. The Answer. “Well, it’s really up to yourself…” I know. I know, young man. I am a free-born son of Embra with a credit card and I am free, in fact, to buy all or none of these metal cubes in which my children would stack dishes with all the care of a troupe of monkeys on a sugar high. What I need is a recommendation. Nope. “It’s up to yourself.” Sigh.

My experience will be very familiar to anyone who’s tried to get help with their finances without taking formal financial advice. All you want is someone to point you in the right direction, but it’s much more complicated. The financial equivalent of “it’s up to yourself” is “I’m sorry, I can’t give financial advice” and it’s so frustrating.

This is on my mind because my firm has just published the latest wave of our study into what’s known as the advice gap – broadly defined as people who could or should take financial advice, but don’t for various reasons.

Only about 9 per cent of UK adults take advice; they are broadly older and more affluent than the population as a whole. That’s still lots of people, but there’s no doubt some who would benefit from an independent professional helping them stop short of getting into that situation.

There are issues of trust, and reputation, and a very Scots desire to downplay one’s own situation –“Och no, advice isn’t for the likes of us, ken, it’s for aw they rich folk”.But there are proper issues of cost – more than half the advisers we surveyed for the Advice Gap report have increased the minimum size of portfolio they’ll look after because costs have crept up over time and it’s just not economic to look after less-well-padded cats.

At the same time, over in Pensions World (one of the world’s five worst theme parks), employers, trustees and pension scheme administrators all feel a similar level of frustration because they’re not allowed to answer perfectly reasonable questions.

The issue here is that there is a very clear and careful line drawn between “advice” (you should do this) and “guidance” (you could do these things but I can’t tell you which is best). That is to say, unless you can pay an adviser, you’re going to get my dishwasher experience.