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Breaking the advice barrier - Pennyworth Co-founder and CPO, Ben Harvey, on the barriers to advice.

Breaking the advice barrier

There is significant value in getting financial advice or financial guidance. In a Which? survey(1) of members who’d taken financial advice in the past five years, the vast majority (82%) rated their experience as positive when it came to value for money. One study by the International Longevity Centre UK (ILC) and Royal London(2) even found those who’d taken ongoing advice were more than £47,706 better off over 10 years than those who didn’t.

Given these findings and the potential value from financial advice you would expect most people to use it. However, this is far from the case, just 28% of consumers according to the latest available statistics from the Financial Conduct Authority (FCA)(3). So, if there is so much value to be gained, why are so few people receiving financial advice?

There are three major barriers as to why aspiring-affluent consumers are not able to obtain the advice they need:

1. Cost and cost transparency (or the lack of it): Another study by Which?(4) looked at the websites of 100 independent financial advisers (IFAs) in 2021, and found 89 didn’t have any pricing online. According to the FCA the average charges are 2.4% of the amount invested for initial advice and 0.8% a year for ongoing advice thereafter. Fees vary by the adviser’s location, qualifications and the complexity of finances. The Which? study also looked at the typical cost of common use cases for financial advice, as follows:

2. Trust: There are around 26,000 advisers in the UK according to the Financial Conduct Authority (FCA). The majority of these are independent (85% in 2019). This means they can recommend financial products from the whole of the market, whereas restricted advisers give advice on just one subject area, or they are limited to recommending products only from certain providers. A good adviser should draw up a financial plan that they’ll adjust according to changes in your personal circumstances, goals and the wider economic environment. This is where an ongoing relationship, for which you’ll usually also pay an ongoing fee, can be beneficial. However, the Which? survey found evidence that almost a quarter of members hadn’t received a financial plan from their adviser, and half only saw their adviser once a year – the bare minimum they’re required to see clients when they’re paying ongoing fees. Only half (54%) get the option to review the ongoing fee arrangement every year, according to another survey conducted by Which?(5) and the FCA raised concerns(6) that people were being placed into ongoing advice as a default and not because it was justified by their circumstances.

3. Access: The average financial advice customer has £150,000 in assets under management, according to the FCA, and it can be difficult to find an IFA if you’ve got less. Which? found that only one in six advisors would take a client if they had less than £50,000 to invest. The vast majority (99%) of consumers have less than £150,000 in liquid assets(7). This means the next wealthiest 19% of consumers, with incomes over £40,000 a year or liquid assets between £40,000 and £150,000, are often unable to access a financial advisor. For these consumers financial guidance – where someone provides relevant options, rather than recommending a single course of action - can be a very valuable alternative, especially when they either can’t find a trusted advisor or are unable to afford one.

Our mission at Pennyworth is to break these barriers. Closing the value and advice gap with AI-driven tailored financial guidance:

  • Our solution is a goals-based financial planning app. Pennyworth’s financial planning technology helps you discover, set and track your most important goals easily and turn them into a financial plan at the click of a button, FREE of charge.

  • Our vision is to truly remake banking for the twenty-first century. With new bionic capabilities that put a private banker in your pocket to provide personalised financial guidance. Helping you reach your goals faster and more confidently with tailored saving and investment strategies and a bespoke borrowing line. All with leading rates either from Pennyworth or a trusted partner.

  • Democratising financial advice by providing access to personalised guidance to the 10 million UK aspiring-affluent consumers that face the most serious value and advice gap.

We’re launching a new game-changing version of our financial planning app in the coming months. Be the first to try by registering here.


  1. Which? Magazine Survey, February 2022

  2. ILC, What it’s worth - Revisiting the value of financial advice, December 2019; Royal London, Exploring the advice gap - The opportunities, the challenges and the need to work together, April 2021

  3. FCA, ‘Evaluation of the impact of the Retail Distribution Review and the Financial Advice Market Review’, December 2020

  4. Which? Magazine Study, June 2022

  5. Which? Survey, April 2022

  6. FCA, ‘Evaluation of the impact of the Retail Distribution Review and the Financial Advice Market Review’, December 2020

  7. HMRC, Identified Personal Wealth, Liquid Wealth, 2014-16; ONS, Household net financial wealth, 2018-2020; Team Analysis.


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