AS a new year beckons, many of us will be making ambitious resolutions to improve our health, careers and relationships – but seemingly not our finances.

New research has suggested that the majority of Scots suffer from so-called “financial paralysis”, with almost two-thirds of the population saying they lack the knowledge and confidence to take charge of their money in 2016.

The findings by online broker TD Direct Investing suggested that 3.8 million Scots remain mystified about the world of investments, with 61 per cent saying they have no interest in building a personal portfolio next year.

More than a quarter said they did not have enough savings to invest while a fifth believed that investing was “too risky”.

TD Direct argues that these so-called “naked investors” are leaving themselves financially vulnerable due to “continuing austerity measures, record low interest rates and diminishing government support”.

But deciding how to proceed with your finances has never been more fraught with difficulty.

The financial sector is in the midst of an ongoing digital revolution, which has seen an explosion in online services promising to bring cheap and easy financial management to the masses.

Companies such as Money On Toast and Nutmeg aim to offer a simpler way into investing, providing a questionnaire to determine your appetite to risk and then offering fund suggestions based on your answers – albeit from a relatively small range.

This phenomenon – known as “robo-advice” – is challenging the rarefied world of professional financial advice, now only worthwhile if you have large sums to invest or a pension pot to convert at retirement.

However, only six per cent of Scots say they have heard of robo-advice, according to Nutmeg, which also recently found that investors north of the Border are still more likely to consult an IFA than those in other parts of the UK (33 per cent compared to a national average of 28 per cent).

Changes introduced in the Retail Distribution Review in 2013 brought an end to backdoor commission paid by providers to advisers in return for recommending products. Advisers are now required to charge by the hour or as a percentage on investments.

The development quickly created an “advice gap”, locking ordinary investors out of bespoke consultations but it also opened the door for new firms to provide low-cost investment picking online.

Nutmeg says 66 per cent of Scots prefer face-to-face advice, with only 48 per cent moving online to make big financial decisions.

The firm’s founder, Nick Hungerford, said: “Scotland is in danger of falling behind because there’s a lack of awareness about what online financial services can provide.

“With online tools, we can experiment and learn at our own pace without being charged by the hour. We can see what we lose in fees as a clear proportion of total return. And we can see immediately on a screen how the choices we make today – about risk and how much we invest – should affect our wealth in two, three decades’ time when we retire or have grandchildren.”

These convenient services bring their own dangers, however, not least in being adopted by some advisers keen to maximise profits.

Diane Carr, an Edinburgh-based independent financial adviser with the Intrinsic network, has accused her employer of encouraging its advisers to use a system that amounted to “robo-advice in disguise”.

She claimed the firm's 'restricted' advisers could charge an upfront fee of 3 per cent, plus an ongoing charge of 1 per cent, in return for asking clients 12 questions to assess their risk appetite and making a recommendation from just a limited number of investment portfolios.

Intrinsic responded: “We do see restricted advice as a lower risk, lower cost model that can deliver excellent outcomes for the vast majority of clients. However, we also recognise the value of independent advice for certain clients and as such support a number of thriving independent advisers and firms.”

Graeme Mitchell, managing director of Lowland Financial in the Borders, said robo-advice should be “embraced” as an opportunity to cut costs and help a wider segment of the population, adding that it was particularly useful for those “saving from scratch”.

He added: “Passive investments, such as funds which simply track an index, can be easily provided online and consumers can be guided on putting money into savings, pensions or paying off the mortgage. But there are massive dangers. There need to be opt-outs during the questionnaire where people can be directed towards advice if their situation is more complex. It’s a bit like DIY – you can do it yourself but could end up with a botched job.”

Carl Melvin of Renfrewshire-based Affluent Financial Planning, said: “A big issue is accountability. If something goes wrong, you have redress by using an adviser, as they are personally liable for any poor advice.We need to make face-to-face advice cheaper, not dumb the whole process down.”