Posted on: 10th February 2020
People are quick to make assumptions when it comes to financial advice. For some, it is only for those who have a high net worth, and others believe that the fees are too high. However, Royal London has teamed up with the International Longevity Centre to bust these myths and assumptions.
Data from What it’s Worth – Revisiting the Value of Financial Advice, was analysed from the ONS’s Wealth and Assets Survey. Tracking the wealth of thousands of people over almost two yearly “waves” between 2004 and 2006, Royal London was able to determine the financial outcomes of those who received financial advice and those who didn’t.
As a result, those who did choose to take financial advice were an average of £47,706 better off! This is split between a £30,991 boost inwealth and addition of £16,715 in other financial assets.
Affluent vs. just getting by
What is important to note is how financial advice can benefit those with a smaller income. Split into two groups of “affluent” and “just getting by”, the latter group benefited from a 35 per cent uplift in their financial wealth. The “affluent” group saw an uplift of 24 per cent. When looking at pension wealth, the “just getting by” group saw a 24 per cent uplift and the “affluent” group saw an uplift of 11 per cent.
The main reason for these improved outcomes is that those taking advice will likely invest in assets that could bring in more return, despite the higher risk. Across the sample, financial advice could add approximately 8 percentage points to the probability of equity investments.
Ongoing financial advice
The research also makes note of the impact of seeking regular advice. Those who took advice in wave 1 and wave 5 demonstrated almost 50 per cent more in pension wealth than those who only reported receiving advice in one wave.
As you can see, ongoing financial advice is not just for those with a high net worth. Financial advice is there for anyone who wants to see their money go further! So, if you are based in Greater Manchester and would like to give yourthe best financial support, get in touch with today.