Trust and Financial Guidance: The support gap consumers are trying to close
Managing our money has probably never been more important. Yet for many consumers, particularly younger adults, knowing where to turn for trusted financial guidance remains a challenge. The UK cost of living crisis remains a very real issue; consumers are often having to choose between spending now (at times just to keep their heads above water) vs trying to save for the future.
So, while managing money well is vital, do consumers feel they have the knowledge and support to do it effectively?
Self-reported financial confidence is high, but is this confidence a little misplaced?
Most UK consumers are confident they are managing their money well and making sound financial decisions (85%). But there’s a clear generational divide in confidence: among those with more life experience (aged 55+) this increases to 9 in 10, whilst for young adults (18–34) it drops to 8 in 10. The younger you are, the less confident you feel about managing your finances.
And it may be through learning the hard way that has dented the confidence among younger consumers. 3 in 5 (60%) of 18–34-year-olds agree that they have made poor financial decisions in the past, far higher than the 30% of consumers aged 55+ who say the same. Having been caught out in the past, this may mean younger consumers are more wary of taking risks – at least without advice – instead sticking to products and providers they feel comfortable with.
The demand for financial guidance is clear
Given the lower levels of financial confidence, it’s no surprise that younger adults are seeking financial guidance. Yet while demand is high, uncertainty about where to go for advice and who to trust remains a significant barrier. 2 in 3 (68%) of 18–34-year-olds have often sought it in recent months (vs only 36% of those aged 55+). They want advice on a range of areas, but most often those focused on the future (savings 54%, investments 34%, pension 14%). Many clearly understand the value of making wise decisions now which will benefit them in the long-term.
In the near term, they also want advice on insurance (28%), mortgages (20%) or loans (15%). Worryingly, a fifth of 18–34-year-olds looking for financial guidance say it is related to debt (21%), showing the tough economic climate is hitting those just starting out hard.
When advice is everywhere, who do you believe?
This issue isn't about not being able to access sources of financial advice, many are doing this. But having multiple sources is adding further complexity, when all consumers really want is clarity.
4 in 10 don’t trust financial advice, feeling it’s biased towards selling them something they might not need. Half of consumers are concerned by the number of conflicting sources of financial support. The challenge is not a lack of information. Consumers are surrounded by it. The challenge is knowing which sources to trust, and which advice is right for their circumstances.
Coupled with this, a third agree that they don’t know the best place to go for financial guidance, which is a particular barrier for younger adults (18–34) where this rises to 42% (vs 22% among the older generation 55+). And younger adults are also more likely to find financial planning too complex (41% vs 27% for those aged 55+). For many younger consumers it can feel like a bit of a minefield.
Does AI have a role in financial advice?
Among the younger, more tech-savvy consumers, the answer is yes. While overall there is a degree of reluctance towards accepting financial information from an AI source (likelihood of usage is 41% overall), younger adults are more willing to consider it as an option (69%). The accessibility and familiarity of AI among this group may make it an appealing alternative to more traditional sources of advice. Brands should consider how AI-based advice can be leveraged to support customers, ensuring that guidance is anchored in individual circumstances to build credibility and trust.
This openness to AI suggests that younger consumers are not wedded to traditional advice channels. What matters most is accessibility, relevance and trust. If AI can help remove complexity and provide personalised guidance, many are willing to consider it alongside more established sources.
What does this mean for brands?
Advice needs to be accessible and reliable: A lack of knowledge and understanding about how and where to access advice is a key barrier. Clear signposting and support across a range of channels is essential to help consumers engage with confidence.
Reduce complexity, don't add to it: Consumers are surrounded by information, but many struggle to know which sources to trust. The brands that stand out will simplify decision-making rather than adding more noise. Provide focused and targeted outputs tailored to individual needs.
Use AI to close the advice gap: There’s some appetite for AI, which will continue to grow. Consumers would rather access this through trusted brands, creating an opportunity for established providers to lead in this space.
The opportunity for brands is clear: make financial guidance easier to access, easier to understand and easier to trust. Those that do will be best placed to build lasting relationships with the next generation of consumers. If you'd like to understand how your customers are making financial decisions and where they need more support, get in touch.