Research finds those who consult with financial advisors are better off
The headline captured my attention: ‘Advisor clients 39% a year better off in retirement—research’. It’s talking about a 39 per cent better income in retirement, which could be the difference between you having a comfortable retirement and one where you struggle.
These findings come from research by the UK company Dunstan Thomas in a Baby Boomer survey. In UK pounds, clients of financial advisors could ‘hope for a total post-retirement, pre-tax household income of £33,557.45, compared with £20,373.40 for those who have made all their retirement income provisions alone’.
Wait a moment, won’t that be skewed by the fact that those who have more money are more likely to seek advice anyway?
Yes, comes the answer from Adrian Boulding, the director of retirement strategy for Dunstan Thomas. But he argues, ‘It is worth noting financial advisors instil the financial disciplines of saving, planning and reviewing progress, which helps build long-term savings.’
In other words, seeking out a financial advisor can help you become intentional in your financial planning for retirement.
The lack of planning revealed
The survey (of 1,002 UK Baby Boomers) found that many were quite happy to be ignorant about retirement finances with almost half (47 per cent) knowing nothing and not planning to find out anything about the pension before retiring.
Only a fifth (20 per cent) had sought or planned to seek face-to-face financial advice.
A similar proportion (17 per cent) had sought or said they would seek advice from the UK’s Money Advice Service, The Pensions Advisory Service, or Pension Wise.
On the specifics of inheritance tax-related financial issues, more than half (54 per cent) of those surveyed had no intention of visiting an advisor about this topic. In fact, only 12 per cent planned to use an advisor for this purpose.
The advantages of a financial advisor
If you’re a regular reader of these posts you’ll already know that we encourage individuals to get good financial advice. It’s important!
In this survey, a small percentage (16 per cent) used an advisor to obtain the security of a professional opinion, and another 8 per cent because they didn’t want to make weighty financial decisions alone.
They’re good reasons, but so is knowing exactly where you stand financially as you plan your retirement. That allows you to plan with purpose.
Even if you’re financially weak, it allows you to plan accordingly for a satisfactory retirement that comes within your financial limitations. Better that than to have big plans and then have them dashed when you discover the reality when you receive your first monthly retirement payment.
Want to know how to find a financial advisor and have more reasons to search one out? Try these posts: