£40,000 richer if you take financial advice


Paul Gibson, a director and financial planner at Stockton-based Active Chartered Financial Planners, talks about some interesting recent research by the International Longevity Centre-UK…

Recently, we came across some research that is extremely close to our hearts, and is something that has been the pivotal purpose of Active’s being since inception.

People who take financial advice (independent or restricted) are on average £40,000 better off than those who do not, says research by the International Longevity Centre-UK (ILC-UK).

The research was based on 5,000 people and households across the United Kingdom.

The report (supported by Royal London) examined the impact of financial advice on two groups – the ‘affluent’ and the ‘just getting by. Aptly named ‘The Value of Financial Advice’, the report found people that received financial advice between 2001-2007 had accumulated “significantly more” liquid financial assets and pension wealth than their unadvised counterparts by 2014.

The ‘affluent’ group was a wealthier subset of people who were more likely to have a degree, be part of a couple and be homeowners. The ‘just getting by’ group was made up of less wealthy people with lower levels of education, single, divorced or widowed and renting.

It found the ‘affluent, advised’ accumulated on average 17% (£12,363) more in liquid financial assets than the ‘affluent, non-advised’ group, and 16% (£30,882) more in pension wealth, bringing the total to £43,245.

Meanwhile the ‘just getting by, advised’ accumulated on average 39% (£14,036) more in liquid financial assets than the ‘just getting by, non-advised’ group, and 21% (£25,859) more in pension wealth, bringing the total value added to £39,895.

The report also found financial advice led to greater levels of saving and investment in the equity market, with the ‘affluent, advised’ group 6.7% more likely to save and 9.7% more likely to invest in the equity market than their non-advised peers.

Equally, the ‘just getting by, advised’ group were 9.7% more likely to save and 10.8% more likely to invest in their equity market than their non-advised counterparts.

Those who had received advice (in the 2001-2007 period) also had more pension income (than their peers) by 2014, with the ‘affluent, advised’ group earning £880 more per year than the ‘affluent, non-advised’ group. The ‘just getting by, advised’ group earned £713 more than their counterparts the ‘just getting by, non advised’ group.

This research is extremely reassuring not only to ourselves and our proposition, but more importantly to you. At Active we are continually seeking ways to ‘add value’ to our clients, and there comes no better way of doing so than in your own personal wealth.

The content of this piece is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.


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