11/12/17Putting off taking financial advice could be a costly mistake
Have you ever talked yourself out of seeking professional financial advice?
You are not alone, almost half (49%) of over-50s who are not yet retired have done the same thing. But, with research by Dunstan Thomas showing that those who take financial advice could enjoy £13,000 more each year in retirement than those who don’t, it is worth challenging that decision.
Why do people avoid taking professional financial advice?
According to research from Retirement Advantage, cost and trust are the top factors deterring over-50’s from seeking professional advice. In a study of people who had yet to retire:
- 42% said that the cost of financial advice put them off
- 31% do not feel that they can trust financial advisers
- 31% do not think that taking financial advice is necessary
- 18% do not think that financial advice will benefit them
- 15% said that they can get the advice they need directly from their pension adviser
Where else do people turn for advice?
Rather than seeking advice from a professional, respondents said that they have, or will, get their information from:
- The internet (44%)
- The Government’s Pension Wise guidance service (42%)
- Their pension provider (35%)
- Their employer (18%)
There is a range of great information available on the internet for those who want to understand their finances and options better. However, this information is very generalised and will not be tailored to your own needs and circumstances. The same is true for the Pension Wise guidance service, they are in place to give you the facts, not recommendations.
Consulting your pension provider may seem like a logical decision, but bear in mind that they are a business. As a business, their main aim is to retain you as a customer and ensure that you keep your money in a place where they can benefit from it. That means that they are not likely to give you advice which is in your best interests if it involves recommending that you take your custom elsewhere.
Unless they work as a financial adviser or planner, your employer is not qualified to give financial advice.
Is financial advice worth the cost?
In short, yes.
When compared to other sources of financial information, independent financial advice is priceless. Whilst guidance and facts are available in abundance, both online and through guidance services, it does not compete. Financial advisers and planners work to get to know your situation, then suggest strategies, services and products which work both with you and for you, to help you to reach your financial goals.
The advantages of taking independent financial advice include:
- Unbiased information: The advice you receive from an adviser will not be designed to sway you toward a particular provider or products
- Ongoing education: Financial advisers work hard to keep their knowledge up to date with most advisers completing annual assessments to ensure the information they give to you is accurate.
- Experience: Your financial adviser will be able to make applications, handle paperwork and communicate with other professionals in a very efficient way. It is common for those who choose to undergo complex financial processes alone to get confused or take longer than those with help
- Protection: As financial advisers are regulated by the Financial Conduct Authority (FCA), you get peace of mind, knowing that you are supported in the event of unexpected issues
It is vital to ensure that you do not view the value of financial advice on the cost alone. Consider the value of an ongoing relationship with a professional who is available to help you to make complex, and sometimes, life-changing decisions when you need them.
If that is not convincing enough, Unbiased.co.uk has found that people who take financial advice boost their assets by £41,099, on average.
For more information and to find out how we can help you, please get in touch.