LiveMore survey reveals three in five 50-79-year-olds distrust financial firms
A new survey by LiveMore has revealed an “alarming” lack of trust in financial service providers among those aged 50 to 79.
Almost three in five (59%) in this age group have a lack of trust for the industry. This statistic is particularly concerning given the ongoing scrutiny the sector faces for failing to meet Consumer Duty obligations.
The latest findings closely mirror those of a similar survey conducted by LiveMore in October 2022, which reported a trust shortfall of 58%.
Women were slightly more mistrusting than men, with percentages of 61% and 57% respectively. Even more concerning is that the 70-79 age group displayed the highest level of mistrust, standing at 69%.
Behind these stark numbers are real individuals grappling with financial insecurity, often leading to postponed retirements, mental health issues, and concerns about affording basic necessities like heating their homes.
Leon Diamond, CEO and founder of LiveMore, emphasised the human aspect of these findings commenting: “The industry needs to recognise that these aren’t just statistics, they’re individuals whose lives are being adversely affected.”
Recent criticisms from the Financial Conduct Authority (FCA) add another layer to this issue. The FCA published a critical review of lifetime mortgage sales, finding that the advice given in many cases did not meet the expected standards. The regulatory body also identified 400 instances where promotions had to be amended or removed altogether. Such findings tarnish the industry’s reputation and further erode consumer trust.
Consumer Duty, a set of guidelines aimed at ensuring good outcomes for customers, is at the heart of this issue. LiveMore stresses the importance of a full affordability assessment before making any mortgage decisions.
The effects of compound interest can make lifetime mortgage products very expensive, especially if held for many years. In many cases, if a standard mortgage is affordable, that is usually the best outcome for the customer. Lenders and intermediaries have a duty to serve customers and attain good outcomes, as set out in the Consumer Duty rules. LiveMore published a white paper in June titled “Consumer Duty: Why Later Life Lending is About to Change Forever,” which highlights why adhering to Consumer Duty is beneficial for the industry.
Mr Diamond concluded: “As we look to the future, it is crucial that the 59% statistic falls sharply. We can achieve this if we all adhere to Consumer Duty guidelines and put the customer first.”
