Premier Wealth Management based in the UK

Does financial advice really make a difference?

How many times do we ask ourselves the question “would financial advice really make any difference?”. Today, we would like to answer that question for you; YES, it does.

There is lots of research to show that advice works by adding real value to people’s financial circumstances in the long term. If we look at, “What it’s worth: Revisiting the value of financial advice” from the International Longevity Centre UK (ILC)*, research suggests that those who took advice around the turn of the century were on average over £47,000 better off a decade later than those who did not.

This result comes from detailed analysis of the government’s Wealth and Assets Survey which has tracked the wealth of thousands of people over two yearly ‘waves’ since 2004-06.  The wealth uplift from advice comprises an extra £31,000 of pension wealth and over £16,000 extra in financial wealth.

Of great interest and one of the key findings from the research was that the proportionate impact of taking advice resulted more beneficial for those grouped as being ‘non-affluent’ or ‘just getting by’. For the ‘affluent’ group, the uplift from taking advice was an extra 24% in financial wealth (e.g. shares, ISAs, bank accounts) compared with 35% for the non-affluent group. On pension wealth, the uplift was 11% for the affluent group compared with 24% for the non-affluent.

We can base the answer on statistical research, but we can also say that over the years working together with families and individuals we have seen that building up an ongoing relationship with a financial adviser tends to lead to better financial outcomes.

And remember the value of units can fall as well as rise, and you may not get back all of your original investment.

*The research explored the impact of financial advice between 2001-2007 on financial outcomes in 2012-2014. Due to the fact this study was carried out over such a long period, it is the latest data available.

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