Whilst a large number of British adults acknowledge the benefit of receiving financial advice, those regularly visiting an adviser are low, recent research confirms.
Research has also found that the under 35s are the most acutely aware that financial advice would benefit them. So, if you’re under 35, how could professional financial planning help you?
Just 12% of adults regularly see an adviser
A study in 2019 by the Openwork Network confirmed that only 12% of adults see a financial adviser regularly. They also identified a gender gap, with men two times more likely than women to seek advice (23% of males surveyed see an adviser compared to just 10% of women).
Despite the small numbers actively seeking advice, the number of people who consider that financial advice would be of benefit to them is a massive 56%. That number rises to 61% for the under 35s.
With nearly a third of those surveyed admitting they don’t know enough about their money, and over 25% unsure about the state of their finances, the need for professional financial advice seems clear.
Under 35s increasingly aware of financial matters
Claire Limon, Director of Learning and Acquisition at Openwork, thinks that Pension Freedoms have led to increased awareness of financial matters amongst the under 35s.
She says: “It’s not just older people looking for help through retirement, but also younger people who are looking to improve their financial literacy.
“Most people recognise they need an expert to help create and protect wealth for themselves and their families and want to have more control over their finances during uncertainty across the economy.”
Openwork also considered rising house prices and the increase in the number of people taking out pensions as possible reasons for the growing interest in advice.
Does financial advice help?
A recent report from the International Longevity Centre (ILC), with the support of Royal London, sought to quantify the value of gaining professional advice. It listed three key findings:
- People who received professional financial advice between 2001 and 2006 were on average £47,706 better off by 2014/16 than those who didn’t take advice
- Seeking financial advice could be more beneficial (they could see their wealth grow by a higher percentage) for those on moderate incomes, than for higher earners
- Seeing an adviser more than once, and ideally building an ongoing relationship, is even more beneficial in the long term
I’m under 35: What can professional advice do for me?
There are many benefits to seeking financial advice if you’re under the age of 35. Here is our top five:
1. Understanding your goals
Achieving your financial goals is the reason why you should be seeking advice in the first place. But to achieve these goals, you need to be clear about what they are. That’s where an adviser comes in.
Sitting down with a professional can help you think about, and then set out, your short, medium and long-term goals.
2. Helping you budget
Once you know what your aim is, you and your adviser can work out how to get you there.
Having a keen grasp on your income and outgoings is a great place to start. This will give you an idea of your disposable income and the amount left for saving or investment.
3. To help you plan for retirement
The new full State Pension for those retiring during the 2020-21 tax currently stands at £9,110.40 a year. You’re probably going to need more than that to retire comfortably and that’s where retirement planning comes in.
An adviser can help you decide what’s achievable and what will get you to that desired retirement date.
4. To keep you focused
Having a plan is all well and good but sticking to it can be hard. By constantly managing things like pension allowances and ISA subscriptions, an adviser can ensure you make the most of the tax efficiencies these products offer. They can also guide you through downturns in the market, avoiding the emotional knee-jerk reactions that can tempt us all when short-term changes look to impact our long-term plans.
5. Peace of mind
Once your finances are in order and you’re on target to meet your goals, there’s always the unexpected to contend with.
Whatever life or the markets throw at you, having an adviser on hand – whether to reassure or to reassess – can give you the peace of mind to relax and concentrate on the bigger picture, stress-free.
Time to get the advice you need
With 61% of under 35s acknowledging the need for advice, maybe the new decade is the time to make the leap. To return to Openwork’s Claire Limon: “As we head into 2020, it is crystal clear that the need for high quality financial advice remains as strong as ever.”
Get in touch
If you’d like to schedule a review to discuss your long-term goals and your possible investment options, please get in touch. Please email info@investmentsense.co.uk or call 0115 933 8433.
Please note
A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.
