Only 11% of UK adults have sought financial advice. Here’s why you should

Category: News & United Kingdom

As a financial planning firm, we clearly have “skin in the game” when it comes to considering the results of consumer research about financial advice. 

So, we were particularly interested in a survey reported in Professional Adviser regarding attitudes to retirement. The headline figures revealed that:

  • Almost half of those surveyed (49%) reported feeling uncomfortable with their current level of retirement savings 
  • 38% believed it was unlikely that they would achieve their retirement goals
  • A third said they at least sometimes found themselves confused when managing their personal finances.

But the big takeaway for us was that, despite the clear concerns about retirement, only 11% of respondents had sought professional financial advice. And only 10% were prepared to admit that better financial planning would be the most beneficial thing to help them achieve their retirement goals.

When asked about factors that may be more beneficial than financial advice, the most popular options cited were: 

  • A better-paid job (50%)
  • An inheritance payment (19%)
  • An increase in employer pension contributions (12%). 

Of course, all of those alternatives would help, but in our opinion, good advice is one of the keys to making sure you get the retirement you want – and these findings underscore the importance of planning ahead.

Every journey needs a road map

Probably the most important thing a financial planning professional will provide for you is a financial plan. 

From a practical point of view, reviewing your current situation and then looking at the steps required to meet your ultimate financial objectives is a key step towards securing your financial future.

Having a plan in place will help provide you with a firm sense of purpose and structure around your finances and give you the invaluable peace of mind you get from being in control.

Once you have a plan in place, you will be able to adapt it to suit your changing circumstances. 

We commit to reviewing all our client’s financial plans at least annually to ensure you’re still on track to meet your goals.

Access to a financial confidant can be invaluable

As the research reveals, it’s easy for money issues to start causing you concern and prey on your mind. 

Financial decisions can be difficult to make on your own, and they’re rarely just about you. Either directly or indirectly, they can also affect your partner or family, which can add to the pressure you may feel.

Because of this, having a trusted adviser you can share your concerns with, and who can help you make sense of your financial circumstances and suggest solutions to problems you’re facing, could be invaluable.

You’ll have the reassurance that someone’s got your back and that you have a professional with knowledge and experience that they can bring to bear to help you plan your future.

There’s tangible evidence to show financial advice is good for your wealth

As well as providing you with peace of mind, there is also strong evidence to suggest that working with an experienced financial professional can be good for your wealth. 

In a study carried out over a period of more than a decade, the International Longevity Centre looked at the finances of individuals that received financial advice between 2001 and 2006. They then followed up 10 years later see how their wealth had changed. 

Their report revealed that receiving advice resulted in an average increase in wealth of more than £47,000.

It also showed the benefit of an ongoing relationship with a financial adviser, as those that were receiving advice at both points of the study had nearly 50% higher wealth than those only advised at the start.

Aside from common planning guidance such as investment choice and the importance of tax efficiency, much of the value of advice comes from behavioural management, such as not over-reacting to periods of market turmoil that can have a short-term effect on the value of your investments.

Helping you find your way through the regulatory jungle

It’s fair to say that the world of financial planning can be complex and filled with jargon. Furthermore, like much of the finance sector more generally, it can be affected by regulation and legislative change, that even experts can find challenging at times!

An experienced adviser can help you cut through all this to put together a financial plan that’s right for you. They can also ensure that you’re making the most of available tax incentives to help you grow your wealth as effectively as possible.

Even if you have a certain level of financial awareness, working alongside a professional could be invaluable, especially when it comes to issues such as managing your investment risk, and estate planning.

Get in touch

If you want to talk about your own financial planning arrangements, please get in touch with us. 

Please note

The value of your investments 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. 

This article is for information only. Please do not solely rely on anything you have read in this article and ensure that you conduct your own research to ensure any actions you may take are suitable for your circumstances. All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.