Those who received financial advice in the 2001-2007 period had accumulated significantly more liquid financial assets and pension wealth than their unadvised equivalent peers by 2012-14, a report by the UK think tank International Longevity Centre has found. a�?The Value of Financial Advicea��, analyses data from the largest representative survey of individual and household assets in the UK, the Wealth and Assets Survey.
It finds that, even allowing for the fact that some groups are more likely to seek advice than others, those who received financial advice from a professional Independent Financial Adviser (IFA) in the 2001-2007 period did better than an equivalent group who did not receive such advice, by 2012-14.
The report examines the impact of financial advice on two groups, the a�?affluenta�� and the a�?just getting bya��. The a�?affluenta�� group is formed of a wealthier subset of people who are also more likely to have degrees, be part of a couple, and be homeowners.
The a�?just getting bya�� group is formed of a less wealthy subset who are more likely to have lower levels of educational attainment, be single, divorced or widowed and be renting.
a�?The Value of Financial Advicea�� finds that:
- The a�?affluent but adviseda�� accumulated on average A?12,363 (or 17%) more in liquid financial assets than the affluent and non-advised group, and A?30,882 (or 16%) more in pension wealth (total A?43,245)
- The a�?just getting by but adviseda�� accumulated on average A?14,036 (or 39%) more in liquid financial assets than the just getting by but non-advised group, and A?25,859 (or 21%) more in pension wealth (total A?39,895)
The report also finds that financial advice led to greater levels of saving and investment in the equity market:
- The a�?affluent but adviseda�� group were 6.7% more likely to save and 9.7% more likely to invest in the equity market than the equivalent non-advised group
- The a�?just getting by but adviseda�� group were 9.7% more likely to save and 10.8% more likely to invest in the equity market than the equivalent non-advised group
Those who had received advice in the 2001-2007 period also had more pension income than their peers by 2012-14:
- The a�?affluent but adviseda�� group earn A?880 (or 16%) more per year than the equivalent non-advised group
- The a�?just getting by but adviseda�� group earn A?713 (or 19%) more per year than the equivalent non-advised group
The report found that 9 in 10 people are satisfied with the advice received, with the clear majority deciding to go with their Advisera��s recommendation.
Despite the advantages of receiving advice, only 16.8% of people saw an adviser in the years 2012-2014. Indeed, a�?The Value of Financial Advicea�� finds that even amongst those who took out an investment product in the last few years, around 40% didna��t take advice, rising to 78% of people who took out a Personal Pension. After controlling for a range of factors, a�?The Value of Financial Advicea�� concludes that the two most powerful driving forces of whether people sought advice was whether the individual trusts an IFA to provide advice, and the individuala��s level of financial capability.
Therefore, the report makes a series of recommendations to raise demand for financial advice including:
- Using advice to support the auto-enrolled a�� duty on employers to ensure staff can access the best information and advice on their Pensions
- Mandating default guidance for those seeking to access their Pension savings a�� to ensure people can get crucial information in a complex marketplace and avoid worst outcomes
- Helping to create informed consumers through continued development and roll out the pensions dashboard
- Ensuring regulators continue to place emphasis on access to Independent Financial Advice
Dona��t take my word for it a�� see the attached report which proves it! Contact this Financial Services PROFESSIONAL if you need helpa��a��a��a��..