Financial advice: What are the wider benefits?

New research reveals that sound financial advice goes beyond the expected, in that it can boost confidence and emotional well-being, too. Find out more in our latest article.

A no-brainer?

Along with new research showing that sound financial advice can boost confidence and emotional well-being, there are many benefits that are now more important than ever for keeping effective control over your finances.

The coronavirus pandemic has shown just how quickly unforeseen events can shake even what you thought was stable financial footing, and it’s reminded us all that it’s ‘better safe than sorry’ when it comes to planning. Alongside this, changes in pensions and financial regulations mean more responsibility on individuals for retirement income planning – a trusted financial adviser will mean you remain aware of any changes as well as staying on top of your situation.

The financial benefits of taking advice have been well documented, and research from the International Longevity Centre UK (ILC) in 2019 showed that those who take advice are, on average, £47,706 better off in retirement (in pensions and financial assets) than those who don’t.1

Furthermore, the ILC has undertaken more research this year that suggests that financial advice could go as far as promoting mental health and well-being. In its report, “Peace of mind: Understanding the non-financial value of financial advice”, it suggests that the non-financial benefits may be at least as important as the more obvious financial ones.

Ease your worries

Those who took part in the study and had received financial advice reported that they felt less worried about the future and enjoyed a peace of mind that accompanies knowing they’ve made proper preparation for their later years – including those who were already in retirement.

Through their interactions with a financial adviser, they also felt more financially literate and able to not only achieve their long-term goals but to understand how those goals would be achieved, as well as being empowered to make more complex financial decisions for themselves. Being in control of their financial futures like this made them feel more reassured and less worried than they would have been otherwise.

Closing the gap

Despite these benefits, however, there’s still a significant ‘advice gap’ – fewer than one in six people are currently taking advice. Part of this comes from lack of awareness of the benefits of this advice, as well as how and where to find it. There was also a fear among those who haven’t taken financial advice – especially women – that doing so would lead to less control, and that decisions could be taken out of their hands. The experience of the advised participants, however, showed this worry to be unfounded.

Closing the ‘advice gap’ is a vital step in providing peace of mind to all, which is why the ILC is calling on the government, the industry and the FCA to work together to highlight the benefits of taking financial advice, both financial and non-financial.

You can read the report here, and a Wellesley financial adviser is always available to offer further help with your own financial planning.

Sources:

1 ILC, What it’s worth – Revisiting the value of financial advice, November 2019, based on receiving professional financial advice between 2001 and 2006 resulted in a boost to wealth (in pensions and financial assets) of £47,706 in 2014/16.

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