Millions of people are missing out on financial advice that could help them reach their goals because of misconceptions, research finds. Speaking to a financial planner can help you organise your finances, understand the impact of your decisions, and make sure you’re on track to reach future goals.
According to Royal London, 9.4 million people in the UK choose not to look for a financial adviser despite being open to the idea of advice. While there is a range of reasons someone may choose not to take financial advice, the survey suggests that some are not seeking advice due to misconceptions. Among them are:
1. Financial advice is too expensive
Almost half (47%) of respondents said that one of the reasons they didn’t seek financial advice was that the cost would be too expensive. Interestingly, 40% also admitted they didn’t know how much it might cost to seek financial advice.
How financial advisers charge varies depending on the firm and your circumstances. This may be a one-off cost or an ongoing percentage of your assets. Financial advisers must be clear about the cost of financial advice. Many will also offer an initial meeting free of charge so you can meet them, discuss your needs, and understand if they can help you. If you’d like to discuss our services and fees, please contact us.
When weighing up the cost of financial advice, it’s also important to look at the bigger picture. A study from the International Longevity Centre (ILC) published in 2019, found that advised clients accumulated more wealth than non-advised clients. It found that those that took financial advice between 2001 and 2006 were, on average, £47,706 better off in 2014/16.
2. I can look after my own money
Over a third (35%) of respondents said they didn’t take financial advice as they felt confident enough to do it themselves. Even when you’re in control of your finances, working with a professional can still add value.
Financial advice can help you understand all the opportunities you have and how best to reach your goals. It can also make sure you are taking advantage of tax-efficient options to help make your money go further. Working with a financial planner doesn’t mean giving up control of your assets but provides you with additional support so you can be confident in the decisions you’re making and the long-term impact they could have.
3. Financial advice isn’t for someone like me
You may think that your net worth or a particular asset has to be above a certain figure to make financial advice worthwhile. However, financial planning can help a range of people.
The ILC report mentioned above found those deemed “just getting by” benefited from financial advice more than wealthy clients. Clients in the “just getting by” category saw their pension wealth increase by 24%. This compares to an 11% increase experienced by “affluent” clients. If you’re not sure if financial advice is right for you, please give us a call.