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    The value of financial advice

    20 July 2017

    Stuart Bartholomew

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    2 minute read

    What is the value of financial advice?

    At Punter Southall Aspire financial planning, we have always extolled the virtue of professional financial advice. We recognize that the financial world is complicated and our aim is always to work closely with our clients to enable them to achieve their financial objectives.

    Can it simply be shown as an increase in asset value driven by recommendations made by those who class themselves as experts, or is it more than that? We feel the real value comes from offering support and guidance, so that you can achieve four key life stage goals.

    We have always believed in the value of good financial advice, but it is still encouraging when that opinion is reiterated by some independent research.

    Our attention was drawn to some research, produced by The International Longevity Centre, which is a charitable organisation focused on some of the biggest challenges facing Government and society in the context of demographic change. They aim to present new solutions to the challenges and opportunities of ageing and undertake research and policy analysis.

    Their paper, produced in July 2017 and entitled ‘The Value of Financial Advice’, highlights the average increase in the value of assets for those people who sought financial advice over those who didn’t. The period chosen was from 2001-2007 and they then considered their asset value by 2012-14.

    How do you put a value on financial advice?

    What impressed us with the report was that they examined the impact of financial advice on a group titled ‘just getting by’ as well as one titled ‘affluent’. The ‘affluent’ group was formed of a wealthier subset of people who are also more likely to have degrees, be part of a couple, and be homeowners. The ‘just getting by’ group is formed of a less wealthy subset who are more likely to have lower levels of educational attainment, be single, divorced or widowed and be renting.

    The report found that

    • The ‘affluent but advised’ accumulated on average £12,363 (or 17%) more in liquid financial assets than the affluent and non-advised group, and £30,882 (or 16%) more in pension wealth (total £43,245)

    • The ‘just getting by but advised’ accumulated on average £14,036 (or 39%) more in liquid financial assets than the just getting by but non-advised group, and £25,859 (or 21%) more in pension wealth (total £39,895)

    • Finally, it was also noted that those who had received advice in the 2001-2007 period also had more pension income than their peers by 2012-14.

    These findings highlight what we know - and we hope that you know as well - and that is that good quality financial advice clearly has value to it.

    To read the full report, click here – and if you have any questions concerning this or any other matter, please don’t hesitate to contact us.

    Related Resource

    The Value of Financial Advice
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