The Impact of Financial Advice

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Analysis by Royal London and the International Longevity Centre (ILC) has found that Financial advice provides an average of £47,000 wealth uplift in just ten years.

The research also found the proportionate impact of taking financial advice is greater for those of more modest means. Of 4,100 people surveyed, those who ‘were just getting by’ with their wealth had a 35% uplift from taking advice, while those who were defined as ‘affluent’ had a 24% gain.

When it came to pension wealth, the affluent group had an uplift of 11% and those who were just getting by had an uplift of 24%. The research followed on from a detailed analysis of the government’s Wealth and Assets Survey, which tracked the wealth of thousands of individuals over two yearly ‘waves’ since 2004-06.

The wealth uplift from advice comprised of an extra £31,000 of pension wealth and over £16,000 extra in non-pension financial wealth.

Royal London said it challenged the International Longevity Centre (ILC)  to compare those who received financial advice and those who did not despite the often different personal finance characteristics. One of the reasons for the greater wealth of those receiving advice was the likelihood they would invest in riskier assets-  those who received advice were eight percentage points more likely to invest in equities.

You can read the full report here:

ILC director David Sinclair said it was a “simple fact” that those who take financial advice are more likely to be richer in retirement. He added: “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.”

At BlackBear Financial Group we believe that following a tailored financial plan is the best way to help you achieve your financial goals. We can create an easy-to-understand, personalised solution for you regardless of your personal circumstances.

We offer an initial, free and no-obligation consultation – an adviser will review your situation, objectives and future goals and explore all the options available to you.

As the Royal London director of policy, Steve Webb said: “This research uses the latest statistical methods to identify a pure ‘advice effect’ and it is strikingly large. 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.”

Interested in hearing more about the value of financial advice and how we can help you?

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Your investment can go up as well as down and you may not get back what you have invested.

Original article by Sophie King and published in the Professional Adviser 28.11.2019