Consumers Look To Internet For Financial Guidance

By: Steve Smith

People are increasingly using the internet to help them make financial decisions, new research indicates.

According to a study conducted by Birmingham Midshires, some 94 per cent of Britons are going online to get advice on a wide variety of areas, instead of seeking out a traditional face-to-face appointment. Research from the firm indicated that just under half (43 per cent) of people looking for online advice will research into savings accounts. In comparison, some 23 per cent will seek out guidance on mortgages. The study also showed that 21 and 20 per cent of people will spend at least three hours looking for advice on savings and mortgages respectively.

Out of all those seeking monetary guidance, the majority (55 per cent) will go to a price comparison website, while 46 per cent visit an independent financial adviser. Meanwhile, a third of respondents claim they would ask a friend for advice on topics such as personal loans, debt and budgeting. In addition some 21 per cent of consumers will ask a work colleague for financial help - the same proportion of which will also turn to their fathers.

Commenting on the study, Tim Hague, managing director of mortgages for Birmingham Midshires, said: "The internet has empowered consumers to do their own homework before they commit to a financial product. While websites such as price comparison sites are valuable to help consumers through the financial products maze, financial decisions should never be taken lightly. Where mortgages are concerned, we recommend that people seek the advice of a regulated intermediary to ensure they get the deal that is right for them."

However, he claimed that although it is "great" that people can access information on subjects ranging from secured loans to mortgages "at their fingertips", consumers should remember that such advice should not be treated as generic and that guidance needs to be adjusted to fit with their individual circumstances.

Research from the firm also revealed that just under half (46 per cent) of all respondents feel confident that they will be able to access all the monetary guidance they need - whether it covers secured loans, pensions, mortgages or current accounts - online. Meanwhile, a further 50 per cent of respondents will initially use the internet to research financial options before seeking out a second opinion from an offline source.

And as a result of using both the internet and various offline resources, consumers may find themselves in a more capable position to search out competitive forms of borrowing such as a cheap loan. In October, research conducted by uSwitch revealed that some 32 loans lenders have risen the interest rates on their personal loans, following the Bank of England's decision to increase the base rate in July.

However, the price comparison website suggested that applying for a personal loan online could be advisable as such loans attract a typical interest rate that is one percentage point below those taken out over the phone or face-to-face. Mike Naylor, personal finance expert for uSwitch, also urged borrowers to take the time to ensure that they get the loan which is right for them.

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