Peace of mind: Understanding the non-financial value of financial advice
With changes in pensions and financial service regulations over the past years placing increasing responsibility on individuals to plan for their own retirement income, professional financial advice has never been more important.
Building on previous ILC research, which found that taking advice leads to an average increase in retirement income of £47,000, this new qualitative analysis, supported by St James’s Place, finds that financial advice moreover significantly improves financial literacy, boosts confidence, gives people greater control of their finances, offers greater reassurance, and provides greater peace of mind and security.
However, despite the far-reaching benefits of financial advice for people of all income levels, there remains to be a significant advice gap in the UK, with less than 1 in 6 people taking advice and particularly low uptake rates for women. Key barriers identified in the report are a lack of awareness of what advice is (and is not) and a lack of knowledge of where to find an adviser.
We are calling on Government, industry and the regulator to work together to extend the take-up of advice and ensure an extra five million people understand enough to plan for later life by 2030 by:
- Highlighting both the non-financial as well as the financial benefits of advice.
- Reassuring individuals, through marketing and policy interventions, that the advice which they will receive is designed for their specific needs.
- Increasing the supply and efficiency of advice with the support of technology and through better recruitment and training opportunities.
An independent ILC report, produced with the support of St James’s Place.
Author: Arunima Himawan