What it’s worth – Revisiting the value of financial advice
In 2017, ILC published its report, The Value of Financial Advice, which quantified, for the first time, the value of taking financial advice for people’s overall financial outcomes.
In an ageing society, it is vital that people are able to plan for their financial security in retirement. The Value of Financial Advice demonstrated that expert advice provided by professionals delivers real value in improving people’s finances.
This report presents updated analysis, using an additional wave of data from the Wealth and Assets Survey and considering a number of additional questions. We have found:
- Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in pensions and financial assets) of £47,706 in 2014/16.
- The benefits of financial advice are potentially greater for those we term “just getting by” than for those we consider “affluent”: the former would have seen a 24% boost to their pension wealth compared to 11% for more affluent groups (those most likely to be advised).
- Evidence also suggests that fostering an ongoing relationship with a financial adviser leads to better financial outcomes. Those who reported receiving advice at both time points in our analysis had nearly 50% higher average pension wealth than those only advised at the start.
When it comes to sources of advice and the ways in which people purchase financial products, our analysis shows that technology and the internet already play an important role in information-seeking behaviour among consumers. There is huge potential for technology to support improved access to financial advice – and significant scope for innovation in this field.