Making the case for financial advice

With the Retail Distribution Review (RDR) little over a month away, unbiased.co.uk together with Standard Life have put together some points to highlight the real and tangible benefits consumers can gain by taking professional financial advice. The new regulations will increase the standard of advisers’ professionalism, and provide clearer information for consumers on the services they receive from their adviser and how much advice costs.  

Highlighting the gap between advised and non advised

The unbiased.co.uk and Standard Life ‘Value of Advice’ report¹ issued earlier this year reveals consumers who have sought advice are financially better off and have made better product decisions for their financial circumstances compared to consumers who haven’t sought help from a financial adviser.

What advice has to offer Product choices made: Three quarters (76%) of advised people believe they made suitable product decisions for their financial circumstances compared to 67% who didn’t seek advice 51% advised have life insurance versus 35% non-advised 18% advised have critical illness cover compared to 7% non-advised 39% advised have a private pension, against 21% of those who haven’t taken advice 38% advised have a stocks and shares ISA compared to 19% non-advised Financial benefits: Advice could make consumers as much as £232 a month better off in retirement2 Those who have taken advice contribute more to their pension each month (£167 v £108) Those who have been advised have contributed to their pension for longer (17.9yrs v 13.1yrs) Advised consumers put more into their investments each month (£174 v £130) 43% who have sought advice from an IFA do not feel worried about short term market movement when it comes to investments

Seeking advice brings knowledge

Independent financial advice doesn’t just pay with regard to the amount of money saved up; it also leaves consumers more confident and better engaged with their finances. 

When it comes to retirement savings, over half (51%) of consumers who haven’t sought advice said they didn’t know how much was currently in their retirement fund, but this number fell significantly for those who have sought advice to just over a quarter (27%).

Percentage of pension savers surveyed who did not know the size of their pension pot
	Advised	Non-advised
All pension savers	27% don’t know	51% don’t know
Women	30% don’t know	58% don’t know
Men	24% don’t know	46% don’t know
35-54 year olds	29% don’t know	59% don’t know

Dave McGovern, Head of Retail Marketing at Standard Life, comments:

“The onus is increasingly on individuals to make provisions for their long-term savings but navigating your way through financial services can be a daunting prospect.  It is vital for the industry to be making a case for people to seek advice.  Our Value of Advice report highlights how going to a financial adviser can add value, not only by advising on the most suitable products but also by providing invaluable ongoing support and counsel.  Like other forms of professional advice, such as from solicitors or accountants, we need to clearly demonstrate that while there is a cost for the service financial advisers provide, it is one that is well worth paying for."

Karen Barrett, Chief Executive of unbiased.co.uk, comments, “When it comes to organising your finances consumers should review all their options and shop around for an adviser that exactly matches their needs.  The unbiased.co.uk search allows consumers to search based on location, as well as product areas, qualifications, testimonials, specialist advisers and accreditations (such as Chartered, Certified, Society of Later Life Advisers (SOLLA), ISO and BS standards).  Consumers can further refine their search by as much detail as the amount of money available to invest and size of pension or mortgage.  Helping consumers select the right adviser will ultimately mean that they can make the best decisions for their individual situation and feel confident in their financial provisions for the future.”

Your financial checklist

To help you shop around for the right adviser for you, unbiased.co.uk and Standard Life have created a leaflet called “Choosing the Right Adviser Checklist”.

Visit www.unbiased.co.uk to carry out a free and confidential search for an IFA or financial adviser.

 

ENDS

The full report is available at “The Value of Advice”.

The checklist can be downloaded at: http://www.unbiased.co.uk/adviser-checklist

1. Research based on Opinium Research results, 1,044 online interviews (had taken advice from an IFA) and 1,219 online interviews (had not taken advice from an IFA) from 30 May – 7 June 2012

2. Calculations based on:

6% annual investment return after charges, monthly contributions escalating by 2.5% per annum, 2.5% inflation

Annual paying joint life annuity with 50% spouse’s benefit, 3% escalating

All to age 65

IFA advised on pension planning:

Average monthly pension contribution: £167.01

Average pension pot at age 54*: £74,554.30

Total pension pot at retirement age of 65: £175,121

Annual retirement income of £5,921 (£493 monthly) in today’s terms 

* based on a 54 year-old, the average age of those answering the retirement saving question in our research

Non IFA advised:

Average monthly pension contribution: £108.00

Average pension pot at age 54*: £37,277.10

Total pension pot at retirement age of 65: £92,616

Annual retirement income of £3,132 (£261 monthly) in today’s terms

* based on a 54 year-old, the average age of those answering the retirement saving question in our research

For more information contact:

Anna Schirmer/ Emily Falla/ Maddy Morgan Williams, Lansons Communications: 020 7294 3682

Claire Burston, Senior Media Affairs Manager, Standard Life (0)131 245 5078

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About unbiased.co.uk, the professional advice website

Unbiased.co.uk is the UK's most comprehensive free professional adviser search website, focused on empowering users with the resources they need to make better informed financial and legal decisions. We not only help consumers and businesses find the best adviser for their needs from over 20,000 IFA’s, financial advisers, mortgage advisers, solicitors and accountants listed on our search but we also help them research the market by providing relevant information and tools.  At unbiased.co.uk we like to be transparent about what we do and aim to provide the easiest way for consumers to find and compare advisers meeting their requirements.

The unbiased.co.uk website launched in 1998 and rapidly became the UK’s leading online destination for consumers and businesses looking to find an adviser.  Now attracting over one million visitors a year, unbiased.co.uk is the default adviser directory for consumer websites recommending their audience to ‘Find an adviser’.

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