Investors and savers who take financial advice are on average £40,000 better off than those who shun professional guidance.
Research by think-tank the International Longevity Centre compared the wealth of two groups between 2001 and 2012 – the affluent and the just getting by.
The result was the affluent had significantly more liquid assets and pensions savings on average as they were more likely to take advice.
The study also revealed the affluent were more likely to own their homes, have a degree and to have a long-term partner.
The just getting by group were not as wealthy, renting their homes and to have less education and to be single, widowed or divorced.
IFAs can make you wealthier
The affluent who had taken financial advice had an average £12,363 more liquid assets plus £30,882 more in their pensions than the other group – a total of £43,245 more than average.
The just getting by were split into two more groups – those who had taken advice and those who had not.
The group that had taken financial advice had £14,036 more liquid assets than those who had not and £25,859 more in their pension savings.
The research also highlighted people who had taken financial advice were more likely to invest.
Despite a clear advantage in receiving advice, only 17% saw an adviser.
The driving forces for taking financial advice were revealed as trusting an IFA and each person’s ability to save or invest.
Clear benefit
Ben Franklin, Head of Economics of Ageing at the institute, said: “Our results show that those who take advice are likely to accumulate more financial and pension wealth, supported by increased saving and investing in equity assets, while those in retirement are likely to have more income, particularly at older ages.
“But the advice market is not working for everyone. A high proportion of people who take out investments and pensions do not use financial advice, while only a minority of the population has seen a financial adviser.
“Since advice has clear benefits for customers, it is a shame that more people do not use it. The clear challenge facing the industry, regulator and government is therefore to get more people through the front door in the first place.”
Read the report Value of Financial Advice
