The below thought-provoking article, published by Royal London, reveals the results of a survey conducted with over 4,000 customers to find out how financial advice has a positive impact on their finances, their well-being, and their futures.
‘It’s no secret, there’s always been a link between emotional and financial wellbeing. For those receiving financial advice, it’s always been more than just the practical and financial benefits. But how does financial advice improve emotional wellbeing?
Our research into how customers with an adviser could be better off financially also showed a number of ways talking to an adviser helps financial welling. We were also able to dispel a money myth and prove better knowledge of financial matters can play an important role in feeling good about your money.
Financial advice improves emotional wellbeing and financially security.
The control you have over your money and how you continue to manage it will change over time. Our findings show that talking to a financial adviser makes people feel more confident and financially resilient, especially in times of crisis. Those receiving advice have a greater feeling of being in control and have peace of mind. Our customers told us:
34% – Having access to financial expertise makes me feel more confident in my financial plans.
34% – Receiving professional financial advice helps me feel in control of my finances.
32% – Having contact with a financial adviser gives me peace of mind.
Myth busting: financial wellbeing is for the wealthy
The more money you have, the better you feel about money, right? Not so. From our research results we can see wellbeing and happiness isn’t based on how much money you have. While confidence increases in line with income, there’s still a difference between customers who are advised and those that aren’t advised. Even those surveyed on a lower household income, receiving advice, still feel more confident than those who don’t receive advice.
Does cost affect the emotional benefits of advice?
No. In balancing the cost and the benefit of advice, our customers are telling us that what they pay their adviser doesn’t diminish the emotional benefits. We found that customers with an ongoing relationship with their adviser are twice as likely to agree that the emotional and financial benefits of having an adviser outweigh any costs (38% compared to 16% of advised customers).
Having an adviser also helps boost knowledge
In our research, we found that customers with an adviser feel they have a much better understanding of financial matters, compared with people who don’t have an adviser. A greater understanding of the unknown or complicated leads to feeling more in control.
Customers without an adviser are 3 times more likely not to know where to start when it comes to saving for retirement and nearly twice as likely not to understand inheritance planning.
Feeling good about the future
Customers who receive financial advice trust their adviser and are happy with the advice they get. Satisfaction also increases over time, where there is an ongoing relationship in place. Customers who receive financial advice feel more confident about their future, and feel more financially resilient. Advised customers enjoy psychological and emotional benefits – not just any financial gains.
However you’re managing your money, our research shows how financial advice could go some way to pave the way for a happier financial and overall outlook. You’ll find more help with feeling good about your money and prepared for what might lie ahead in our financial wellbeing section.’
Over the past year, the challenges brought by the Covid-19 pandemic have highlighted the importance of mental health. The year of 2020 sparked a realisation; that we never know what’s coming around the corner, so it makes sense for us to financially prepare for life’s future potential trials. This study confirms that quality financial advice and effective financial planning improves emotional wellbeing and financial security over the long-term. If you are ready to organise your finances and improve your outlook on life, please feel free to get in touch with us here at People & Business IFA Limited.
Stay safe.
Chloe – 10/02/2021