New research shows those customers who receive financial advice can be better off on average by £40,000.
We've sponsored a research project with the International Longevity Centre – UK (ILC-UK) to produce ‘The Value of Financial Advice’ report. This independent report demonstrates that customers who take financial advice can on average be £40,000 better off than those who don’t take advice.
The report analysed data between specific time periods across a range of different individual and household assets in Great Britain and examines the impact of financial advice on two groups. Those who are ‘affluent’ and those who are ‘just getting by’.
The ‘affluent’ group has been identified as those who are more likely to have degrees, be part of a couple and a homeowner. Whereas the ‘just getting by’, are more likely to have lower levels of educational attainment, to be single, divorced or widowed and rent a property. Here’s some of the findings from the report:
When the ‘affluent’ group received financial advice on average they accumulated:
- £12,363 (17%) more in liquid financial assets.
- £30,882 (16%) more in pension wealth.
- A total of £43,245 more,than those who were also deemed to still be affluent but didn’t receive any financial advice.
The report also identified that 6.7% of this group were more likely to save and 9.7% were more likely to invest in the equity market compared to those that didn’t receive financial advice.
Whereas, those within the ‘just getting by’ group who did received advice, on average accumulated:
- £14,036 (39%) more in liquid financial assets.
- £25,859 (29%) more in pension wealth.
- A total of £39,895 more, than those who were also in this group and didn’t receive financial advice.
And this time round 9.7% of this group were more likely to save and 10.8% were more likely to invest in the equity market that the equivalent of those who were in this group but didn’t receive any financial advice.
Here’s what Steve Webb our Director of Policy, had to say about the report:
“This powerful research shows for the first time the very real return to obtaining expert financial advice. What is most striking is that the proportionate impact is largest for those on more modest incomes. Financial advice need not be the preserve of the better off but can make a real difference to the quality of life in retirement of people on lower incomes as well. The evidence shows that when people take advice they are overwhelmingly satisfied and benefit as a result. More needs therefore to be done to overcome the barriers to advice.”
More details about this report and the press release are available on our website.