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The £40k value of advice – and how to make the most of it

Will quantifying the value of advice help boost take-up, and should employers do more to signpost to advice?

Financial advice-planning-advice-cashflow-analysis

A report which puts the value of advice at over £40,000 has kickstarted a debate into whether the workplace holds the key to boosting advice take-up.

A report from think tank ILC-UK and Royal London has calculated advised clients are better off by a total of £41,099 in financial assets and pension wealth compared to those who did not take advice.

The ILC crunched the numbers based on data from the Office for National Statistics’ wealth and assets survey, and looked at the impact of advice between 2001 and 2007 and how this affected outcomes for consumers in 2012 to 2014.

It found that among less wealthy consumers, the benefit of advice came to an average of £14,036 more in liquid assets compared with those who were not advised, with £25,859 more in pension wealth.

Alongside calculating the value of advice, the ILC put forward a number of recommendations to support an increase in demand for advice.

At a roundtable debate at the House of Lords last week, panellists debated one of the proposals: to place a duty on employers to support their auto-enrolled staff in getting advice.

The advice price tag: How do advisers prove their worth?

It was suggested there could be certain trigger points to signpost people to advice, potentially through the workplace, such when a pension pot hits a certain size, at age 50, or when a student loan is paid off.

ILC head of economics of an ageing society Ben Franklin said: “An employer is a relatively trusted conduit. It may be simply a case of providing information on how to get hold of a local, regulated adviser, which would in itself be a step forward.

“A lot of people will just Google where to get advice and who knows what they will find at the end of that. We could end up with an increase in scams if people don’t seek regulated financial advice and end up going to fake intermediaries. There is a role there for employers as an information point, to act as a hand-off to a regulated adviser.”

Royal London director of policy Steve Webb suggested there could be lessons from flexible working obligations which could be applied to advice in the workplace.

He said: “When the Government gives people legal rights to things like flexible working, they tend not to make it a mandatory thing that the employer has to give. They give people a “right to request”. If you can make it clear people have a right to request access to financial advice, and make them aware of that and nudge them, something like that could work.”

Pimfa strategic adviser Chris Hannant said there are advice firms that are happy to work with larger employers as they gain enough new clients through the process. He said workplace advice could be extended to smaller firms if they are grouped together, perhaps facilitated by an organisation like the British Chambers of Commerce. Hannant argued this would make it worth advisers’ while by achieving “criticial mass”.

But Hymans Robertson partner Chris Noon said employers are already supporting advice, particularly through the use of initiatives such as the advice allowance.

He said: “The fact is people still won’t take advice. These solutions still only deliver advice to the people taking advice anyway. We need something more mandatory than a ‘right to request’, and this needs to be enforced in some way.”

In numbers


Benefit of advice versus not taking advice in assets and financial wealth


Increase in pension income for those who had received advice between 2001 and 2007


Number of household interviews carried out to create underlying data on which value of advice research is based

7.5 million

Estimated number of people that received professional advice between 2012 and 2014


Proportion of people who sought advice between 2012 and 2014 from either an IFA or self-employed adviser

Source: ILC-UK, Office for National Statistics



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Robert Milligan 19th July 2017 at 9:59 am

    Again and again this Steve Webb an employee of a Product Provider who is not a Financial Advisor, unqualified, pontificates about PENSIONs as if the Employer has a responsibility to staff, post their employment, please shut up, The above article is pure obfuscation, the employer (I am One) should pay their staff accordingly a figure agreeable to the member of staff’s ability and responsibilities and allow that person to set aside/invest for their own income in retirement, or is the condescending pensions industry saying the intellectual capacity of employed people indicates they are incapable of looking after themselves and the “Employer” should provide educational financial advice! So Victorian!!

  2. Robert Milligan 19th July 2017 at 10:00 am

    O Yes, Just like their current Add on telly!!

  3. The key is Financial Education to at least a basic level. Everyone has money, everyone needs it and everyone needs to know the basics. Only when they understand the basics, will they understand when they need extra help and advice and when can they do it themselves

  4. Robert Milligan 19th July 2017 at 11:24 am

    I whole heartedly agree, but its not the Government nor the employers role to patronise others who think differently from you, We are all educated and we take from that education what we want and use it how we want, to repeat ably be told by those remunerated by the charges that we should Fund a Pension industry is wrong, however I am of one with you, everyone should invest in /set aside sufficient income / assets to provide their own income in retirement, we should put a sunset clause on Retirement state Benefits, and say You Could Not Be bothered to save so please do not rely upon others to provide. The State pension should by the catch net not additional benefits as now!!

  5. Education Education, Education.

    PUT Financial Services Education on the curriculum. It is no good being brilliant at Maths, being extraordinarily articulate in English if you do not know your A from your E when it comes to providing for the 40 years you will need an income in retirement.

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