DIY financial planning on the rise
29 November 2012
Older homeowners who are considering using equity release plans to unlock money from the value of their property may be weighing up their choice without taking financial advice.
According to a new report from Deloitte, close to a third of people (32 per cent) are now doing their own research on financial products in order to avoid paying fees to an adviser.
However, the survey by the firm found that less than a third (31 per cent) of individuals are confident they know enough to choose the right products, which could mean they are at risk of making decisions that put their futures into risk.
More than 2,000 UK adults were surveyed for the research, which was conducted for Deloitte by YouGov, with over a quarter (27 per cent) of respondents stating that they would go direct to the provider having made their own product choices.
The study by the business advisory firm highlights how the implementation of the upcoming Retail Distribution Review (RDR) by the government - which comes into force on January 1st 2013 - is going to have an impact on financial advice.
Andrew Power, lead RDR partner at Deloitte, stated banks, insurers and fund managers are among those facing a "big challenge" as they have to find a new way to communicate with customers who are now doing their own research into the products on the market.
"Large numbers of consumers are not confident they have enough knowledge to make the right financial decisions and so any direct-to-consumer business model must be kept simple and low-cost. There is a risk that consumers who do their own research may not buy the right products," he said.
Lawyer Fiona McNulty, who is a partner in the residential real estate team at Thring LLP, recently said in a question and answer session for Homes & Property that it is "vital" those considering equity release take independent financial advice before making any decisions.
She explained how an expert will be able to consider the personal and financial circumstances of an individual and advise them whether equity release is right for them and which is the correct product to opt for.
Those wishing to find out more about unlocking money from the value of their properties can get in touch with the specialists at Key Retirement Solutions for information and advice.