Article

Is financial advice more valuable than ever?

7 min read 17 Jun 24

It’s an important question which is worth asking, particularly now when the cost of living challenges continue to place added pressure on many of our finances.

If you're ill, you see a doctor and if you're moving house you go to a solicitor. We use experts for important decisions because that’s their job – they have the knowledge that we don’t. But there can be a hesitancy around getting financial advice from experts, often when help is needed most.

Why get advice?

In an M&G Wealth survey¹ people shared their reasons for getting advice from a financial adviser. There are many reasons – some small, some quite significant and some potentially life changing. Here are the top 20 reasons that highlight the value financial advice can potentially add, in so many different ways.

Reasons why people seek advice from a financial adviser

1.	Preparing for retirement	27%
2.	Receiving an inheritance	26%
3.	An unexpected windfall	22%
4.	Inheritance planning	22%
5.	Writing a will	20%
6.	Wanting to begin my investment journey	17%
7.	Getting into financial difficulty	17%
8.	The death of a parent / family member	16%
9.	Me or my partner becoming seriously ill / dying	15%
10.	Contact from your pension scheme	15%
11.	Market turmoil impacting my finances / investments	13%
12.	Maximizing my legacy	13%
13.	A significant change in my career	13%
14.	Looking to get on the property ladder	12%
15.	Contact from the HMRC	11%
16.	Divorce	10%
17.	A financial request from a family member / friend	10%
18.	Wanting to move into ethical / sustainable investing	9%
19.	Getting married	8%
20.	Planning for school fees / university fees for children / grandchildren	8%

¹Family Wealth Unlocked Report 2023. A survey of 2,000 UK adults who have personally, or who have parents, or grandparents, who have received financial advice from an adviser in the last 5 years. Conducted by Opinium for M&G Wealth

It’s not just about the big things in life

The need for expert advice when faced with life-changing circumstances makes sense. But what about seemingly less significant factors, and ongoing financial advice for when things change?

We look after our cars with MOT tests and some of us have dental plans to ensure regular check-ups, health plans to access specialised healthcare, or pet plans to look after our cat or dog’s health. So why not a financial plan with regular reviews from a trained professional, to help look after your money and ensure you’re on track to do what you want in retirement.

"Many of my clients simply want advice around the cost of living challenges and to make sure they don’t run out of money if they decide to retire early or just enjoy spending some of it."

Lucy Moran, a Financial Adviser from M&G Wealth Advice

Does financial advice really pay?

A person who has taken financial advice is £47,000 on average better off than someone who hasn’t taken advice.*

Research by the ILC-UK* has shown that people who take advice increased their wealth significantly. The study was carried out over a number of years to get an extensive view of people's finances and measure the long-term impact. The research looked at two groups of people to see if they were better off with or without advice. The first group were ‘affluent’ and the second group considered themselves as ‘just getting by’. Both groups ended up with an average increase in their wealth of over £47,000 more than those that didn't take advice.

This important research also helps disprove the myth that advice is ‘just for the wealthy’ with both groups seeing a substantial increase in their wealth.

Not only can advice add real value to people’s financial circumstances, it can also have additional non-financial benefits. ILC-UK** also showed that people who took advice were more confident and better prepared for the future. Getting advice improved people’s financial literacy and delivered greater control, reassurance and ultimately peace of mind.

So, a well put-together financial plan with regular reviews by a professional financial adviser really could make a difference to your financial future.

Nothing is certain however, even with an experts’ help the value of your investment can go down as well as up and you may not get back the amount you put in.

*ILC-UK (International Longevity Centre - UK) ‘The value of advice’ report, 2017. The research explored the impact of financial advice between 2001-2006 on financial outcomes in 2014-2016. Due to the fact this study was carried out over such a long period, it is the latest data available. See also ‘What it’s worth – Revisiting the value of financial advice’ 2019. ilcuk.org.uk/what-its-worth

**ILC-UK ‘Peace of mind: Understanding the non-financial value of financial advice’ 2020. ilcuk.org.uk/peace-of-mind

You could benefit from financial advice in a number of ways

Financial peace of mind – we’ve got you covered
Confidence – helping you manage your money through life’s ups and downs
Access to expert advice when you need it – get your questions answered, regular updates and reviews, help to avoid scams which could potentially save you losing money. There is a charge if you accept an advice recommendation or choose ongoing advice – your adviser will give you more details.
A long-term plan for your money
It could potentially increase your wealth

It’s about more than you think

Getting financial advice is not just about financial reviews, planning for retirement and investments. Here’s what else your adviser can help you with.

savings & investment review
retirement planning
inheritance tax planning
protection insurance
intergenerational wealth planning
financial health check up

mapping your life goals
help to manage your cashflow
emergency fund
contingency planning
estate planning
inflation check

tax planning
wealth optimisation
managing investments
debt management
help to avoid scams

And can you put a price on the added emotional benefits you could get, like peace of mind, reassurance, freedom and confidence?

Real life examples where advice has made a difference

We want people to really benefit from financial advice and feel confident to do the things that are important to them. So we talked to Lucy Moran, one of our expert Financial Advisers at M&G Wealth Advice, to see how she has helped just some of her clients.

These examples shouldn’t be taken as advice or a personal recommendation. Advice is personal to you. Tax rules can change and the impact of taxation and any tax relief depends on your circumstances, including where you live.

"I’ve been an Adviser for 17 years and many of my clients have been with me for a number of these. Together we’ve built a relationship and a long-term plan for their money and investments. And that creates peace of mind and confidence for clients, knowing I’m there to help them manage their money through everything life throws at them and help them achieve their goals.

For example, I helped a client recently sort out all of her different pensions. She was single, retired with no income and living in her old family home. She’d lost track of how many pensions she had and quite honestly felt overwhelmed with all of the various statements. I discovered nine different pensions in the end, after I sat on the floor and sorted all the paperwork into separate piles.

I was able to help her combine these into one pension, which was around £150,000. And she was able to take her tax-free cash lump sum and, together with the sale of her home, was able to buy a beautiful new house with a lovely garden. And she can take £1,000 a month income which is flexible. She was absolutely over the moon.

It’s not just the big life events, but the everyday things as well that can make a real difference. I regularly keep in touch with all of my clients and encourage them to check in with me or send me a question if they need to.

I remember one client who had already taken some money from his pension. And he messaged me one evening to say he was going to get another £5,000 out. But I messaged him straight back to tell him to hold off. I checked his account and explained that if he took any more money out it could mean losing thousands of pounds every year for the next ten years. There are some HMRC rules which limit future tax relief when certain pensions are accessed early, and it’s easy to fall foul of these.

He was absolutely fine – he didn’t need the money that much and was just so glad that I had caught this. But to be honest, I was just glad he’d checked in with me first. It’s my job but for clients it really is peace of mind – knowing that I’m there helping them manage their money."

It’s important to note that combining your pensions, also known as pension consolidation, isn't right for everyone. You may lose valuable guarantees on your existing arrangements if you move your pension pot. We strongly recommend speaking to a financial adviser before making this decision.

Would you recommend your financial adviser?

Think back to how you found your adviser – a friend, family member or colleague may have recommended them to you. Or you might have been referred by an organisation, such as your pension provider. In fact, one in four people (42%) who paid for advice came through a recommendation – such as friend or family, other organisation or another professional – according to consumer research The Advice Gap 2023.^#

However, it might come as a surprise that some people don’t take advice due to a lack of trust – with the adviser or the firm they represent. So it stands to reason that people are more likely to seek advice following a recommendation from someone they know and trust.

You may have benefitted from saving money, improving your tax position or just making your investments work that bit harder with the help of your adviser. Whatever it is, you’re in the best position to tell others about the service and trust you’ve built with your adviser.

So, if you’ve had a great experience with your adviser and the recommendations they’ve made, why not recommend them to your family, friends or colleagues? It could be just the start they need, to get the advice they want.

We believe less can definitely be more. So the advice recommendations we make are from a carefully selected range of products and funds. Using a focused and controlled approach allows us to develop an in-depth knowledge of the products, so we can safely and confidently recommend a solution that’s right for you. This is known as restricted advice.

Recommending is easy

To recommend your M&G Wealth Adviser:

Simply share https://securedigital.wealth.mandg.com/recommend with your friend, family or colleague. Tell them how your adviser has helped you
They then simply fill in their details to request a meeting. They will be asked to provide your full name and email address, so that we can thank you
Your adviser will give them a call to arrange to meet

# The Advice Gap 2023, The Lang Cat