A report into the value of financial advice has found that those seeking help from an IFA were better off by an average of around £40,000 compared to their unadvised peers.
The findings from the International Longevity Centre think-tank show that the benefits of advice applied to both the ‘affluent but advised’ and the ‘just getting by but advised.
Affluent advised customers upped their liquid assets by around £12,000 and pension wealth by £31,000 over those that didn’t get advice.
Less wealthy clients still had an uplift of nearly £40,000 from taking advice, with an additional £14,000 in liquid assets and £26,000 in pension wealth.
The study analysed individual and household asset data from across Great Britain between 2001 and 2007, and how this compared with the period between 2012 and 14.
Advice also led to greater savings and equity investment levels among both groups.
90 per cent were happy with the advice they received. The report concludes that trust and financial capability were the two biggest drivers of seeking advice.
As a result, the report recommends that employers should support employees through auto-enrolment with advice, and a default level of guidance should be mandated for pension savers looking to access their pots.
ILC head of economics of ageing Ben Franklin says: “A high proportion of people who take out investments and pensions do not use financial advice, while only a minority of the population has seen a financial adviser. Since advice has clear benefits for customers, it is a shame that more people do not use it. The clear challenge facing the industry, regulator and government is therefore to get more people through the ‘front door’ in the first place.”