The four advice gaps – the missing benefit of money advice

Joe Lane, Policy Researcher

Have you ever had specialist advice on managing your finances? Or have you ever used a plumber? At a launch event for a pensions report last week one speaker said that while most people would ask an expert to fix their boiler, many avoid specialist help with their finances (the UK has five times as many plumbers as financial advisers).

At Citizens Advice, we see every day how important money advice can be for people’s lives. Successive governments have recognised this and aimed to to get more people to take free and paid for advice – this has included tackling an ‘advice gap’ between those who want to pay for advice and those who can afford it. Today we published new research that broadens the concept to highlight four advice gaps which cause people to miss out on the benefits of advice.

The problems with money advice

The Financial Advice Market Review (FAMR), which is currently underway, is a response to concerns that not enough people can afford money advice and that government backed advice (known as ‘public financial guidance’) does not provide value for money. We believe that to get the best outcome for consumers, FAMR should consider what can be done to tackle these four (rather than just one) advice gaps which are causing people to miss out on the benefits of money advice.


The four advice gaps

1. The affordable advice gap

The affordable advice gap is closest to what is generally considered as the ‘advice gap’. It affects consumers who want to pay for advice, but are either not able or not willing to at current prices. Our research found that up to 5.4 million people who don’t currently plan to pay for advice would consider it if it was cheaper. We also found that the size of that gap depends on the type of advice being considered and what that advice is about.

2. The free advice gap

The second gap we identified was the ‘free advice gap’. It affects those people who need money advice, or those who would benefit from it and don’t get it. While as many as 4.5 million people have had free money advice in the last two years, up to 14.5 million people who would have benefitted from advice did not, including 735,000 people who have tried to access free advice and not been able to.


3. The awareness and referral gap

A third gap we found was caused by a lack of awareness of the advice that is on offer and the absence of a system to refer people to the money advice they need. Up to 10 million people who think they would benefit from advice are not aware it is provided by the government. That is compounded by the fact that as many as 3.4 million of those people have raised money issues with a trusted professional in the last two years and were not offered help or directed somewhere they could get it.

4. The preventative advice gap

The fourth gap our research highlighted was caused by the lack of preventative money advice. Our experience of helping people with money problems shows that people rarely have money problems in isolation: 45 per cent of our debt clients have at least one other problem not directly to do with money. We found that not enough people are offered money advice at the times in their lives when they most need it and that when people do get money advice, the non-financial causes of their money issues are often not dealt with.


As the Financial Advice Market Review progresses, it is crucial that the provision of money advice is viewed as a coherent system and the complexities of the way people engage with advice are acknowledged.

Over the coming months we will be building on this research to explore in more depth the reasons people miss out on money advice and to better understand how to ensure that more people get the benefit of high quality money advice, as well as high quality plumbing.

What do you think of this post?
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  1. sreela banerjee

    A super article – financial education or ‘how the world works’ (HTWW) should be compulsory for every 16 or 18 year old leaving full time education.

    The Life Skills Network, a nascent charity, has just completed a pilot study with the Waterloo Job shop where this was one of four components of a summer-long course. The evaluation is just done. Website on its way. We hope to be in touch to see how best we can work together.

  2. Fred Wigley

    Excellent and interesting research. I agree with Samuels points. Some other thoughts. According to data on FCA website the number of financial advisers is actually dropping, presumably due to increased regulations and certification demands. I believe there are around 32,000 registered financial advisers generating around £3B in revenue. I know little of the financial advice industry and I’m sure experts can see lots of holes in my comments, but I struggle to see what pressures exist to push down the cost of advice given the above numbers? Unlike plumbers, its not an expertise that easily crosses national boundaries due to the country specific nature of many financial topics, so unlike skills such as plumbing, electricians, engineers, IT, etc. there is not a ready supply of global labour & global providers to drive down the costs of provision. (which is not all bad, especially for adviser compensation). Nor are there apparently low cost models such as those developed in other industries like air travel, internet shopping, supermarkets, etc. This is unrealistic (naive?) I know, but I do wonder if there is not a potential role for high street banks to play here. Most people have a bank account of some sort, especially if you include Post Office, which means banks are directly connected with almost the whole retail financial advice market already, across the whole income scale. That direct connection and the information it provides them is worth millions in itself. Banking as an industry has an uphill struggle to regain credibility, but if retail banks looked at themselves as GP surgeries rather than just profit generators charging for anything other than a basic account, what affordable & free services might they be able to provide their customers? What in turn would that do to other parts of the Financial Advice market if a low cost model became a threat to retail financial advice providers business? My own experience of comparing the bank I’ve used for 40 years versus a local financial adviser when seeking advice, was that the local advisor provided a much better, customised service, at pretty much the same price. The experience of my bank is that they continually look for new ways of making money from me, but I’m too lazy and risk averse to change banks.

  3. Samreen Masood

    Actually I am confused in child maintenance I want to stop that money could I,is that possible? If it’s possible then how.
    I want stop that money because of my elder son who is another father and I am separated from my husband he doesn’t give me divorce that’s why we are also authority on his money which he don’t want to give us that’s the reason I don’t want to take money just for his son, before merry he promise me that he will take all responsibility to us but he cheat us and always intentionally he hurt to us if I stop that money then maybe I have authority to not allow meet my baby because I don’t want to hurt my another son I never think in my both children differences but my partner makes differences in each other this is too much stressful for me please advise me what is the process to stop that money?
    Best Regards

  4. Richard Barrow

    Surely the problem with comparing paid for financial advice with a plumber is your not comparing like for like?
    For £500 you will get obvious and tangible skills with an immediate end result from a plumber (assuming you engage an impartially recommended tradesperson), whereas investment financial advice might well offer a product that only produces tangible benefits in the medium to long term, especially if the market takes a tumble during the period in question.
    Therefore perhaps the research might benefit from looking at people’s attitudes to financial risk and also what can be done to overcome a possible reluctance by consumers to take a longer view in some financial matters.

    1. Joe Lane

      Thanks for the comments.

      Richard, You’re right. The plumber comparison was to illustrate that point exactly. People need help to appreciate the choices they make on financial advice (and other financial decisions) more than they do when making most consumer choices. Financial decisions normally have a larger monetary impact, have a long-term impact, are often about credence goods; where the value is difficult to ascertain and often involve disparities in information and understanding between the user and the seller.

      Thanks again for commenting – we will be publishing more detailed research in the next few months on each of the gaps – so should hopefully bring out some of your points on attitudes to advice , which are as (if not more) important than the price of it.

  5. Nabila Gardner

    Really pleased to see this matter highlighted and prominent as a talking point. Citizens Advice MoneyPlan project is in place in some bureaux to support the work of Citizens Advice in ensuring qualified financial advice is available to our clients to support their needs and help them understand terminology used in the industry.

  6. Samuel kimbell

    Managing your money is a vital skill that should be taught in Schools,by your relatives and by personal experience.
    To obtain advice from your Financtual institution should come as second nature,they should not be looking at how to make money from you unless it is in the interests of the customer.
    This should be enhanced and covered by good Laws that cover the individual and therefore create a better,more informed Society.

    1. sidney heap

      how much money are you allowed in the bank
      & get pensioners credit, a married couple.?

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