A new study supported by former Pensions Minister, Steve Webb, has found that regular professional financial advice provides an average uplift in wealth of £47,000 during a 10 year period.
According to analysis by the International Longevity Centre, those individuals who received professional financial advice between 2001 and 2006 would have seen a £47,706 boost to their wealth by 2014 – 2016.
Surprisingly, the study revealed that the benefits of taking financial advice were greater for those classed as ‘just getting by’ when compared to their more ‘affluent’ counterparts.
In comparison, those who were ‘just getting by’ saw a 35 per cent increase in wealth compared to ‘affluent’ saver who saw their wealth increase by 24 per cent.
Similar results were found when looking at pension wealth, with affluent savers seeing their wealth rise by 11 per cent, while less affluent groups saw their wealth grow by 24 per cent during the same period.
Importantly, the survey’s respondents who said that they had received ongoing support from a financial adviser were almost 50 per cent better than those who had only received one-off advice.
Steve Webb said: “’This research uses the latest statistical methods to identify a pure “advice effect”, and it is strikingly large.
“If financial advice can add £40,000 to your wealth over a decade compared with not taking advice, it is incumbent on government, regulators, providers and the advice profession to work together to make sure that more people are sharing in this uplift.”
David Sinclair, director at the International Longevity Centre added: “The simple fact is that those who take advice are likely to be richer in retirement.
“But it is still the case that far too many people who take out investments and pensions do not use financial advice. And only a minority of the population has seen a financial adviser. We must now work together to get more people through the ‘front door’ of advice.”