Up to a third (34%) of investors surveyed said they chose to ignore their adviser’s recommendations because they had held back relevant information which the adviser couldn’t factor in. With the quality of advice dependent on the accuracy of the information a client shares with their adviser, the findings point to a worrying ‘honesty gap’.
Transparency was not the only factor contributing to the decision to ignore advice. A third (33%) felt the advice they received was not right for them at the time, and just over a quarter (27%) weren’t clear on the outcome of their adviser’s plans. 28% of investors argued that the advice received went against their values.
Meanwhile, almost three in ten (29%) admitted they had chosen to follow the advice of friends and family over their adviser.
Investors embrace AI tools for basic needs
At the same time, the use of AI to support financial decisions is growing in popularity. Nearly two-thirds (63%) of investors are considering low-cost AI-powered services to help with basic financial planning. Advised investors are more likely to use a low-cost AI service for basic planning needs (72%) with a quarter (24%) very likely to consider this option if it were available.
Half (49%) of investors see AI as a good starting point for financial planning but will continue to seek specialist human-led advice for the more complex elements.
It remains that more than a third (36%) of people would like to engage with real-life advisers from the start, just 9% said they would prefer no human contact at all.
Jenny Davidson, Intermediary Wealth Director at Scottish Widows, said: “The ‘honesty gap’ remains a significant challenge for advisers. When people withhold or overlook key details, it can directly affect the quality and relevance of the financial advice they receive. And while friends and family may feel like a natural first port of call, their guidance may lack the professional and impartial expertise of regulated financial advice.
“Ultimately, effective advice only works on trust - and without transparency, there is a real risk that individuals make decisions that could lead to poorer financial outcomes. One of the potential benefits of AI is clients may feel more comfortable opening up and sharing information they may hesitate to disclose face-to-face. However, the human element remains essential for navigating more nuanced decisions.
“As trust in AI-powered tools grows, the need for openness and confidence in the advice process remains just as important. AI will play a role in the future of advice, particularly for Targeted Support and more transactional needs. However, the strongest outcomes are likely to come from a human-in-the-loop approach - enhancing, rather than replacing professional expertise for clients with more complex investment requirements.”
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