According to a recent study1 by St. James’s Place (SJP), the three main advantages of seeking professional financial advice or more comprehensive financial guidance are increased quality of life, enhanced mental wellbeing, and improved financial resilience.
However, perceived impediments, such as people assuming that guidance is just inappropriate for ‘people like me’, restrict up to 11 million people in the UK from seeking help.
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In order to better understand how financial advice and assistance of all kinds affects people and families around the UK, SJP’s Real Life Advice Report, the first chapter polled just under 12,000 people.
It also looked into what is believed to be barriers that stand in the way:
- The relevance barrier – a third (33%) say their personal situation is too simple to require advice.
- The perception barrier – Nearly 1 in 10 (8%, rising to 14% of 18-34s) have not considered financial advice because they are not aware of its potential benefits.
- The timing barrier – 1 in 7 (14%) of those aged 18-34 and 1 in 20 (6%) of those over 55 believe it’s either too early or too late to take advice
Results
The results show that 24.6 million people in the UK have never received any type of financial advice or assistance.
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By GlobalDataAdditionally, SJP’s research showed 84% of respondents felt their mental or emotional state had improved, and 92% reported feeling less anxious, more confident, and less vulnerable as a result of receiving financial assistance and guidance.
Being able to save more (25%) and have a more pleasant retirement (32%) were the top factors in the boost of quality of life reported by two thirds (65%) of respondents, which rises to 75% for those who receive ongoing financial advice.
Furthermore, nearly half (47%) think that seeking financial guidance helped them achieve a specific life goal or overcome a challenge. This climbs to three in five (58%) of those who receive continuing financial counsel. The following includes:
- Owning own home, upsizing, and paying off mortgage – 28%
- An inheritance for children – 19%
- Divorce, bereavement, redundancy – 13%
- Starting/expanding family through IVF/Adoption – 8%
The study also found that counsel can dramatically improve financial understanding and minimise vulnerability in people with less than £20,000 ($26,286) in assets, whereas those with more than £100,000 have more trust in their financial prospects.
SJP is advocating for a regulatory change to close the gap between guidance and holistic advice, design targeted support with consumers’ interests in mind, and train more advisers.
The number of financial advisers has remained consistent, but SJP is committed to introducing more talent through its Academy.
Mark FitzPatrick, CEO of St. James’s Place, stated: “Financial advice and broader guidance can transform lives, but millions are not reaping the benefits because perceived barriers are holding them back. Many believe their circumstances don’t warrant advice, they’re unaware of how it might help them, or they feel it’s too early or too late to take that leap. As a result, they’re missing out on the improved financial and emotional wellbeing advice can bring.
“Too often advice or guidance is seen as only for the two extremes: for the very wealthy or for those in financial strife. We have to come together to break down these indisputable barriers.”
