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 research demonstrates that customers who take financial advice can, on average, be £40,000 better off than those who don’t take advice.
The report analyses data between specific periods across a range of 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 a degree, to be part of a couple and to be a homeowner.
The ‘just getting by’ are more likely to have lower levels of educational attainment, to be single, divorced or widowed, and to rent a property.
Here are some of the findings from the report:
When the ‘affluent’ group received financial advice, on average they accumulated:
- £12,363 (17 per cent) more in liquid financial assets
- £30,882 (16 per cent) more in pension wealth
- A total of £43,245 more than those who were also deemed to be affluent but didn’t receive any financial advice
The report also identified that 6.7 per cent of this group were more likely to save and 9.7 per cent were more likely to invest in the equity market compared to those who didn’t receive financial advice.
In comparison, those within the ‘just getting by’ group who received advice accumulated, on average:
- £14,036 (39 per cent) more in liquid financial assets
- £25,859 (29 per cent) more in pension wealth
- A total of £39,895 more than those who were also in this group but didn’t receive financial advice
And this time, 9.7 per cent of this group were more likely to save and 10.8 per cent were more likely to invest in the equity market than 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 therefore needs to be done to overcome the barriers to advice.”
More details about this report and the press release are available on our website.
