UK Investors 'Blind' To Their Own Net Worth

by Phillip Morton, Investors Offshore.com

22 February 2006

Less than half of those who responded to a survey by the UK financial services firm, Standard Life know their overall financial worth.

According to Standard Life, its research, which found that only 15 per cent of people know where their savings are invested, paints a picture of "massive confusion" concerning individuals' knowledge of their own financial worth.

Standard Life commissioned the research to understand how much people truly know about 'asset allocation' and the value of their assets and liabilities. The company says that its findings support the development of 'Wrap' propositions in the UK, such as Individual Savings Accounts (ISAs), within which investors can hold investments such as shares in a tax friendly wrapper. Standard Life believes that these Wraps have helped people to manage their financial affairs more appropriately.

Further highlighting the confusion that people feel over their financial worth, Standard Life's research also showed that less than half of people believe their savings and investments are held in the most tax efficient manner, and almost half (45 per cent) claim never to have reviewed their finances with a financial adviser. Only 14 per cent think they could find out the value of their savings from their financial adviser.

Despite this, the research finds that almost half of people say they do know the current value of their assets and liabilities. However, almost one quarter (23 per cent) claim not to have sufficient savings and investments to worry about their value.

John Taylor, Marketing Director, Standard Life, noted that:

"With so much talk today of a pensions crisis and a savings gap, it is of great concern that so many people are still confused over their financial planning. Asset allocation is key to achieving their future financial security, yet with so few knowing what theirs is, it means many people are wearing a financial blindfold when it comes to their future plans. Financial advice is the way to remove this blindfold."

"Increasingly, financial advisers will use Wrap products to ensure that growing numbers of people have their finances managed in a holistic fashion, in the most tax efficient manner and with regular reviews of their asset allocation. It will mean more people achieving their long term financial aims."

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