RDR impact ‘continues to be felt’

More people are turning to their parents when it comes to better understanding money issues.

Research published by NFU Mutual has revealed a significant upturn in the proportion of the population who turn to mum and dad when they have a pressing financial issue they need advice on, instead of seeking the counsel of an independent financial advisor (IFA).

The publication of the Retail Distribution Review (RDR) in January last year changed the way people pay for financial and debt advice in the UK and NFU Mutual stated this has been the major driving force behind these changes.

Overall, the research showed nine per cent of Britons have faced a major financial decision since the rollout of RDR and while meeting with an IFA remains the most popular choice among individuals seeking financial advice, at 56 per cent of Britons, the report showed this is 14 per cent lower than in previous polls.

At the same time, the number of people seeking advice from banks has fallen by 34 per cent, with just 21 per cent of people taking this route post-RDR.

Conversely, a more than one-third (36 per cent) increase in the number of individuals seeking financial advice from family members has been witnessed over the same period; although this group still only makes up 15 per cent of the population.

Sean McCann, chartered financial planner at NFU Mutual, said: "In so many families, parents already act as a bank, a taxi service, babysitter and even a relationship counsellor for their children. However, as more people are turning to family for financial advice, it's unlikely mum and dad will have all the answers."

As such, Mr McCann argued it is always wise to listen to one's elders and those who know us best can often have words of wisdom to impart. However, when it comes to tackling money problems, there really is no replacement for the counsel of a qualified financial expert.

Posted by James Francis