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Financial Regrets of the British
Most British adults (55%) have regretted purchasing a particular financial product or signing up to a particular financial service, according to a new report from MINTEL. Poor advice and being misled are considered the most common reasons for making a mistake, and one in every seven (15%) adults felt that they had actually been misled.
Senior Finance Editor Paul Davies says that the figures are 'perhaps not too surprising given the spate of high-profile mis-selling scandals that have dogged the financial services industry in recent years. These have all severely tarnished the industry's image and left millions of customers dissatisfied with the performance of their products'.
Davies says that endowment mis-selling is a key part of this. 'The prospect of facing a mortgage shortfall due to the poor performance of an endowment policy can clearly be expected to have left many of these consumers feeling that they have been the victims of poor advice or have been misled'. This ties in with an especially high level of complaints in the 35-44 age group.
According to the report, 'Education and advice in financial services', three-quarters (74%) of adults do not understand how complex financial products, such as investments and pensions, actually work [Who are the other 26% kidding? - Ed.]. The same proportion say they have learnt most of their understanding of financial products through trial and error. Some 94% of British feel that children should be taught basic financial skills as part of their education. Avoiding debt at 80% is seen as the most critical topic to teach, while three-quarters (74%) emphasised the importance of managing household accounts. Some two thirds (66%) of consumers felt that it was important to teach the best ways of saving.
Friends and family are the second most common source of financial advice, after banks (36% and 49% of people have used these, respectively). Davies says this evidence of the power of personal recommendation in the sector 'provides further rationale for the financial world to continually strive to fulfil or exceed customer expectations'.
Although a substantial majority of consumers (72%) are confident that the products they hold are either definitely or probably suitable for their needs, this leaves around 13 million consumers in the UK who 'either do not know whether their financial requirements are being met or are sure that they are not being adequately being catered for' says Davies. 'This is definitely cause for concern for the industry'.
MINTEL's web site is at www.mintel.com
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