The current economic situation is volatile. Energy prices have risen twice since autumn 2021 and have been predicted to jump a further 32% in October this year[1]. With fuel and food also on the up, consumers are facing the biggest fall in living standards since the 1950s[2].
In response to this, the Office for National Statistics (ONS) has revealed nine out of 10 British adults have said their living costs are rising, while a quarter surveyed admitted they were struggling to pay bills[2]. It’s a tough time for many households at the moment.
While financial advice and planning may be the last thing on many people’s minds, there is evidence that it may support your financial goals in the long run. There is also an increasing number of families sharing the same financial adviser.
Should myself and my family members use a financial adviser?
Using a financial adviser is very much a personal choice and one that has to work for your personal circumstances. A financial adviser can help with things like (but not limited to):
- Saving or investing money
- Planning for retirement
- Buying a property
- Understanding what to do with a lump sum of money, such as inheritance.
It’s important to note, there are organisations that offer free financial guidance. However, the information received will be more general. Dedicated financial advice is tailored to you and your situation. Guidance services are not regulated by the Financial Conduct Authority (FCA), unlike financial advisers who must be registered with the FCA.
The financial products recommended to you by a financial adviser should be affordable to you, take your saving goals into consideration, match the level of risk you’re comfortable with and take account of whether you pay tax[3].
Investing in sound financial advice may come at a price but there is some evidence to suggest that the benefit outweighs this cost.
Can investing in financial advice save you money?
Research released has suggested that seeking financial advice can benefit both affluent and non-affluent households.
A study conducted by the International Longevity Centre and Royal London found that UK adults who took professional financial advice between 2001 and 2006 experienced an average increase in their assets of nearly £48,000 after 10 years. This is compared to those who took no advice[4].
Elements of the research showed that it wasn’t necessarily those who were categorised as ‘well off’ who did better with their investments.
Participants who fell into a ‘just getting by’ category (whose income and expenditure were roughly balanced) saw their pension pot increase by 24% after receiving financial advice compared to savers in the same category who didn’t receive any.
Those in the ‘affluent’ group had a boost to their pension pot by on average 11% after receiving advice. There are of course limitations with any study but there does appear to be a correlation in the findings between receiving trusted financial advice and experiencing greater growth of assets and savings over a period of time in contrast to not receiving any.
Is sharing caring when it comes to a financial adviser?
You may have a financial adviser that you liaise with regularly but have not introduced to your children. Or perhaps your parents have used the services of one for years but you’ve not been inclined to do the same.
Whatever your situation, it’s worth considering expanding that relationship. New research has highlighted that a third of UK families now share the same financial adviser[5]. Of those respondents in the survey who have an adviser, over half (57%) say they share them with their parents. Also, a fifth say they have received financial advice in the last three months, with over half (53%) stating that they’d received advice in the last 12 months.
The benefits of sharing a financial adviser with other family members may include an element of trust of using a known individual, as well as families feeling comfortable with the fact that all their finances can be reviewed together in one place.
When breaking down the taboo of talking about money, it could be a good idea to start close to home and there may be no better time to consider taking control of your finances, or helping a loved one to do the same, than now.
