You are here: Home - Saving & Banking - News -

Financial advice sees £47k wealth boost in a decade

0
Written by: Paloma Kubiak
28/11/2019
Taking financial advice can boost your coffers by £47,000 in just 10 years with those living more modestly more likely to benefit.

The ‘advice effect’ research reveals that for those who received advice between 2001 and 2006, their assets were boosted by an average £47,706 by 2016.

This included an extra £31,000 of pension wealth and over £16,000 extra in non-pension financial wealth.

And the benefit of financial advice is felt more for those of more modest means.

The research by Royal London and the International Longevity Centre revealed that ‘affluent’ groups saw a wealth uplift of 24% in financial wealth (shares, ISA, bank accounts) compared to 35% for non-affluent groups.

On pension wealth, the uplift is 11% for the affluent group compared to 24% for those living more modestly.

The wealth surge for those who take advice is likely due to the group investing in assets which offer greater returns but for greater risk. Taking advice is likely to add around eight percentage points to the probability of investing in equities.

The research also revealed that people are more likely to search for advice in their mid ‘20s to mid ‘30s as well as in their mid ‘50s to mid ‘60s, consistent with big life choices such as getting a mortgage or a pension.

However, while an estimated 17% of the adult population in Britain received expert financial advice between 2012-2014 – around 7.5 million people – the groups stated that people who may need advice don’t seek it. Around 40% of people who took out an investment product did so without advice, rising to 78% of those who took out a personal pension.

Another issue in the market is that people don’t understand how advice is paid for as 30% who received advice believed it was free.

Steve Webb, director of policy at Royal London said: “Many of those who receive financial advice can testify to its value but it has always been difficult to quantify.  This research uses the latest statistical methods to identify a pure ‘advice effect’ and it is strikingly large. If financial advice can add £40,000 to your wealth over a decade compared with not taking advice, it is incumbent on government, regulators, providers and the advice profession to work together to make sure that more people are sharing in this uplift.”

International Longevity Centre director, David Sinclair, said: “The simple fact is that those who take advice are likely to be richer in retirement. But it is still the case that far too many people who take out investments and pensions do not use financial advice. And only a minority of the population has seen a financial adviser. We must now work together to get more people through the ‘front door’ of advice.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Coronavirus and your finances: what help can you get?

News and updates on everything to do with coronavirus and your personal finances.

Everything you need to know about being furloughed

If you’ve been ‘furloughed’ by your company, here’s what it means…

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Scheme extended to help scam victims get their money back

Scam victims will continue to receive help from their banks to get their money back after funding for a voluntary...

Close