As we enter the new year, and a new decade, it’s worth considering where you – and your finances – will be in 10 years’ time. Many things can contribute to the status of your wealth, such as salary, pensions, investments and inheritance. We can preach ‘til we’re blue in the face about the importance of planning your long-term finances. But what’s the true value of sound, professional, financial advice?
‘Financial advice can increase wealth by almost £50,000’
Well, according to a recent report commissioned by Royal London, financial advice can increase the average person’s wealth by almost £50,000 over the course of a decade. The International Longevity Centre (ILC-UK) studied the value of financial planning for people who received professional advice in the early-to-mid-2000s. The updated report analyses the fluctuations in wealth for those individuals in the years 2014/16. The results use detailed analysis of the Government’s Wealth and Assets Survey (W&AS). Since 2004/06, the W&AS has tracked the wealth of thousands of people in two-year periods. Using ‘propensity score matching’, the analysis found:
- On average, those who received advice experienced £31,000 more in pension wealth.
- The same group also saw, on average, an extra £16,000 in non-pension financial wealth.
- Those who continued taking advice throughout the period of study had pension pots around 50% higher than those who’d only taken advice at the beginning of the period. So, the longer-term recipients of financial advice were, on average, better off.
- One of the more interesting findings was that people with means that are more modest experienced a greater proportional impact than their more affluent counterparts.
- For people with more money, the average uplift following advice was 24% on pension wealth. Meanwhile, for the ‘non-affluent’ group, it was 35%.
- On non-pension wealth, it was 11% for those who are better off and 24% for the less affluent.
‘A better chance of financial success’
Furthermore, further analysis, such as Vanguard’s ‘Adviser Alpha’ study, estimate that longer-term relationships with advisers can add as much as 3%p/a to a client’s returns. The general consensus then is that by fostering an ongoing relationship with a financial planner, like Danbro Financial Planning, you have a better chance of financial success. Here’s DFP Director, Liam Winstanley, on the significance of financial planning advice:
“If you haven’t engaged with a professional financial planner before, it can be something of a ‘leap of faith’ to part with both your valuable time and hard earned money. I’m biased of course, but the benefits can be very significant.”
“Some of the benefits are more easy to measure. Monetary investment returns, tax savings, reduced mortgage rates, increased savings levels or valuable insurance protection are tangible ways to assess the value of advice.”
“Other benefits, though, are more nuanced. Our clients have referenced the peace of mind attached to having a clear and understandable financial strategy. They’ve also fed back the importance of ‘having someone in your corner’. Our expert counsel will help you make sensible decisions about your finances. Regardless of what life – or the markets – may throw at you, we’re on hand to help.”
So, if you’re contemplating your financial future, talk to a financial planner today. Good advice and a well-structured plan reduce pressure and help you make more of your money. Whatever your circumstances, DFP have got you covered. Contact us now to find out how we can help your finances flourish.
The value of your investment (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.