The research also found the proportionate impact of taking financial advice is greater for those of more modest means. Of 4,100 people surveyed, those who ‘were just getting by’ with their wealth had a 35% uplift from taking advice, while those who were defined as ‘affluent’ had a 24% gain. When it came to pension wealth, the affluent group had an uplift of 11% and those who were just getting by had an uplift of 24%. The research followed on from a detailed analysis of the government’s Wealth and Assets Survey, which tracked the wealth of thousands of individuals over two yearly ‘waves’ since 2004-06.
The wealth uplift from advice comprised of an extra £31,000 of pension wealth and over £16,000 extra in non-pension financial wealth.
Royal London Director of Policy, Sir 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.” ILC Director, David Sinclair, said it was a “simple fact” that those who take financial advice are more likely to be richer in retirement. He added: “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.”