A word of advice …

Post by Mearns & Company in News

The saying ‘A goal without a plan is just a wish’ could have been written about taking financial advice, as new research shows the benefits stretching beyond simply number-crunching.

A recent survey found that people who had taken financial advice were more confident when it came to planning their future, and thinking through the difficulties that often surround ageing, including illness, long-term care or loneliness.

These are issues most of us find difficult to contemplate: no one likes to think about themselves, or a loved one, falling ill for example. But this research suggests those who have actively planned for the future feel less anxious or uncomfortable confronting these topics.

Making a financial plan, with or without an adviser, can also help people feel more positive about their current situation. The research by Standard Life for their ‘Retirement Voice 2022’ survey found this doesn’t just apply to wealthier savers and investors, but those across the income spectrum. The research found low income ‘planners’ were three times more likely to feel very comfortable with the amount of savings they had, compared to those on a similar income with no financial plan.

Lack of understanding

Despite these positive outcomes, however, it is clear many people find financial planning difficult on their own. This research found 72% are doing little, if anything to plan for their retirement — and may end up not only poorer, but more stressed about their finances as a result.

People find retirement planning particularly difficult. Half of consumers surveyed said they found information on pensions ‘overwhelming’, and two in five said they had no idea what to do next with pension information and statements.

And pensions aren’t the only financial products people find difficult to understand. A separate survey, by the Financial Services Compensation Scheme (FSCS), found that almost half of investors wished they’d spent more time researching investment products. When asked why they had not, common answers given were that it was ‘too time consuming’ or ‘too complicated’.

This suggests many people now hold investments where they do not fully understand the risks or product terms. The FSCS says this lack of due diligence could leave some vulnerable to scams.

We obviously believe in the benefits of taking personal, expert financial advice when seeking products and drawing up a financial plan to meet your goals. And now the research proves it.