Britons seek emotional comfort more than financial gain when taking financial advice
Research from Standard Life released on 18 October 2012 has found that while most UK adults seek out professional financial advice for a practical reason, such as a specific financial need or life event, what many actually value is the emotional reassurance the advice process provides them.
Professional financial advice
The survey of 1,600 people who had used a professional financial adviser, carried out by YouGov plc for long-term savings and investment company Standard Life, found almost 60 per cent of UK adults who have ever used a professional financial adviser said that a specific financial need (34 per cent) or life event (25 per cent) – like a divorce, redundancy or moving home – were two of the top reasons why they sought professional financial advice.
Financial confidence and security
But it is financial confidence and security that is given as the most desired outcome from seeking professional financial advice (36 per cent), greatly outweighing more obviously material concerns such as more wealth (7 per cent), greater income (9 per cent) or a bigger pension (11 per cent). Almost half (47 per cent) said they felt more confident that they were in control of their finances after taking professional financial advice.
Most valuable aspect of the financial advice
Consumers who have used a professional financial adviser rate ‘reassurance that I am doing the right thing’ as the most valuable aspect of the financial
advice they were given (21 per cent), with having a ‘clear financial plan for the future’ (13 per cent) being considered the next most valuable.
The research comes as the financial advice sector heads towards a critical change, the implementation of the Retail Distribution Review (RDR) at the start of 2013.
How it makes consumers feel
Stephen Ingledew, Standard Life Managing Director, Customer and Marketing, said: “Our research has shown that the real value of financial advice lies in how it makes consumers feel. It’s clear for many people that reassurance and confidence are more important than more material considerations such as being demonstrably better off. In other words ‘peace of mind’ can be priceless.
“In the run up to the introduction of the RDR regime there has been a lot of focus on the cost of financial advice. But we believe the more fundamental impact will be that more and more people recognise the value of the professional services that financial advisers can provide in delivering this peace of mind.
While many advisers have been moving away from product-based sales for some time to provide a holistic, long-term financial planning service, RDR will make this the industry standard as advisers will be required to clearly articulate their on-going services and client engagement. This can only be good news for the industry and the customer and we believe there will be a thriving advice profession in the post-RDR market for many years to come.”
Ability to explain financial matters
Eight out of ten (81 per cent) of those who have used a professional financial adviser say they trusted their financial adviser. When asked why, their adviser’s ability to explain financial matters was given as the most rated factor (42 per cent), with quality of previous advice given as the second most important factor (21 per cent).
Having ‘great knowledge and expertise’ was given by the most respondents as the best description of their professional financial adviser (19 per cent), closely followed by ‘he/she was interested in my financial situation’ (18 per cent) and ‘he/she worked in my best interest rather than his or hers’ (16 per cent).
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 4,175 adults, 1,600 of whom had sought professional financial advice. Fieldwork was undertaken between 28 September and 1 October 2012. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).