More people are using social media and AI to get financial information.
Research from Queen Mary University of London found two fifths of 4,500 adults surveyed across the UK saying they’d used social media as a source of financial guidance, while polling by investments provider OneFamily suggests 2.6 million young adults (under 30) have used AI tools to help make decisions about their finances.
At the same time, the traditional financial advice industry is showing signs of declining – sparking concern that people will fill the gap by turning to unregulated sources of information to make big choices surrounding their money.
Financial advisers – who recommend to people tailored strategies for investing, retirement, pensions, and tax planning – have to register with the UK’s financial watchdog, the Financial Conduct Authority, which means the industry is heavily regulated, with recourse if things go wrong.
Just 250 out of a total of 36,571 advisers currently practising in the UK are under 25.
Nearly half are over 50, but with those advisers approaching retirement, the numbers could drop dramatically, unless younger staff train and take their place.
If the advice industry starts to contract, while less regulated social media sources of information expand, are we approaching a perfect storm? And what could this mean for people trying to make informed decisions about their money in the future?
Why are so few advisers young people?
The advice sector has a population that skews towards older professionals – with nearly a fifth of all advisers being over 60.
With a lack of young people becoming advisers it means the sector is starting to get a little smaller – and there are warnings that this may become more dramatic in the future.
Will Humphries, chartered financial planner at The Penny Group, said young advisers aren’t entering partly because the early career earnings “simply don’t compete” with other sectors.
He added: “The often commission-heavy model means years of unpredictable income at a time when peers in law, banking, or tech are already increasing their earnings consistently and on a structured basis. This is a ‘tough sell’ for any young professional trying to get on the property ladder.”
Humphries also feels awareness of the job is simply lacking.
He said that those who did enter the industry tended to have fallen into it, rather than actively opted to do so.
He said: “Advisory firms are rarely visible at graduate fairs and few offering meaningful internships – most young people never seriously consider it as a path.
Until the industry tackles that visibility problem alongside the structural barriers, I believe attracting the next generation of talent will remain an uphill struggle,” he said.
What is the risk if the trend isn’t reversed?
Without enough new entrants to replace the advisers leaving, there could be reduced access to advice and increasing pressure on existing advisers, which in turn risks pushing up costs and limiting availability.
“For too long we’ve seen the skew of the advice profession to those reaching the end of their careers, which is a concern because as older advisers retire, many firms won’t survive them, in turn accelerating the advice gap for the 90 per cent of people who already don’t have access to proper financial guidance.
“We could see a lot of knowledge walking out the door. People who’ve spent decades in this profession carry an enormous amount of expertise that may not be systematically passed on.”
Kristian added as a society we were entering the “great wealth transfer”, which is the largest intergenerational shift of assets that has ever been seen, and younger clients will need people they can relate to.
Between £5.5trn to £7trn is estimated to pass from baby boomers to younger generations in the UK over the next 30 years according to research from Unbiased, and that transfer is already under way.
Kristian added: “I’ve sat with clients who’ve received life-changing sums without ever having had a proper conversation about money beforehand.
“Without that groundwork, things can unravel in ways nobody anticipated: children forced to sell assets to cover tax bills, or grandchildren unknowingly disqualifying themselves from first-time buyer status and facing Lifetime ISA penalties.”
Social media and AI as financial information sources
More and more people are turning to social media for financial help, and much of this comes from financial influencers – often known as finfluencers. These are accounts with large followings that give information about money to other users.
Romany Youell, 24, is the founder of The Finance Woman – a financial advice service – and became the UK’s youngest adviser at 18. She believes there is a place for these social media influencers, but that it should not replace regulated advice – it should work alongside it.
She said: “We’re seeing more financial content than ever online, but not always from regulated or qualified sources.”
“Social media can be brilliant for starting conversations around money and improving financial literacy, but there’s a huge difference between general content and regulated personalised advice,” she explains.“I’ve already seen cases where people have nearly made huge irreversible financial mistakes based on things they’ve seen online or generic AI generated information that wasn’t tailored to their situation,” she adds.
But she says there is a risk that this access to information creates a false sense of sufficiency.
She says that while a finfluencer can explain what an ISA is, walk you through a budgeting framework, or demystify investing, they cannot assess your full financial picture, your tax position, your risk profile, your estate planning needs and give you accountable advice tailored specifically to you.
Bola said: “Those are two very different things and the gap between them becomes most visible at life’s biggest financial moments like buying property, planning for retirement, receiving an inheritance, protecting your family.
“So, the lack of young advisers entering the sector should absolutely be a concern. As wealth continues to transfer to younger generations and as the creator economy produces a new wave of high earners who need genuine financial guidance, the sector needs advisers who understand that world and can speak to it.
“If the pipeline of young talent isn’t there, that’s not a gap finfluencers can fill. It’s a gap that leaves people underserved at the moments that matter most,” she explains.
What does the financial advice industry need to do?
Experts said the need for advice wasn’t diminishing and there needed to be more advisers entering the industry to meet that demand.
Amanda Cassidy, managing director of Quilter’s adviser academy, said that firms themselves needed to attract staff, and that required them to look at their recruitment strategies.
She said: “Firms can address the pipeline issue, but it requires clearer and more realistic routes into the profession. Becoming an adviser can feel like a significant leap, particularly for younger people without prior exposure.”
Amanda suggested a more structured progression or starting in support roles such as paraplanning to allow individuals to build technical knowledge and understand client dynamics before taking on full advisory responsibility.
Others say the advice on offer itself needs to change too, to adapt to the needs of younger customers.
Youell said she felt “out of place” at times within the industry and that it needs to adapt to show younger people its importance.
“For me, the future of advice has to become more approachable, supportive and innovative. A lot of younger people feel disconnected from traditional financial advice, so the way we communicate and build relationships has to evolve,” she said.
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