People often ask me “What is the value of Financial Advice?”. As financial advice is not tangible, I can understand why people may not be able to see the value it delivers. In addition, the benefits it delivers can be a long way off and there is no instant gratification. So often people can’t justify the extra costs having a financial adviser may involve. In this article, I will explore “what is the value of financial advice?” and what this means in monetary terms.
What is the value of Financial Advice?
There have been a number of recent articles based on a report published by Royal London and the ILC (Independent Longevity Centre). The report “The value of financial advice” found that:
- Those who were “affluent but advised” accumulated on average:
- £12,363 (17%) more in financial assets and
- £30,882 (or 16%) in pension assets than those who were none advised.
- That’s £43,245 more on average.
- The group who were classed as “just getting by” but advised accumulated on average:
- £14,036 (39%) more in financial assets and
- £25,859 (or 21%) in pension assets than the equivalent non-advised group.
- That’s £39,895 better off on average.
- The overall value of receiving financial advice in the period 2001-2007 is therefore approximately an additional £41,099 in financial and pension assets. This means that those who took advice have accumulated 20% more assets than those who have not taken advice.
- The report also found that the advice received also had a positive impact on pension income, amounting to approximately £773 more per year (that’s £7,730 over 10 years).
The report illustrates that receiving Financial Advice assists in the accumulation of more pension and financial assets than those who do not seek advice accumulate.
So, what is the value of Financial Advice? It could be an additional £41,099 in assets on average.
But how does Financial Advice have this impact? Read my next article to find out.