Almost half of 54-71-year-olds have no intention of seeking financial advice, according to research from Dunstan Thomas.
Of course, choosing to seek financial advice is a personal decision and there are some people who do just fine without it. However, the same research shows that those who do seek advice could be more than £13,000 better off each year, than those who make investment and saving decisions alone.
Where do baby boomers get their information?
25% of baby boomers said that they rely on the financial pages of national newspaper to influence their financial decisions. This is worrying as media groups are not unbiased, and newspaper content is written for one purpose; to sell newspapers. Meanwhile, a financial adviser will have your best interests at heart, offering services and options which are suited to your current position.
Thanks to the rise of technology, financial advice and guidance are available at our fingertips, which can make visiting a financial adviser seem pointless and expensive. This explains why 17% of baby boomers prefer to use the guidance from services such as Money Advice Service, The Pensions Advisory Service and Pension Wise.
These are credible sources of information, and a great place to start. But, it is important to remember that this is generalised information, which may not be a good fit for your personal circumstances and lifestyle. Additionally, this information is classified as ‘guidance’ rather than ‘advice’.
The difference between ‘advice’ and ‘guidance’
Worryingly, 36% of baby boomers said that they do not know the difference between financial advice and guidance. Just 17% said that they were confident in their ability to know the difference.
‘Guidance’ does not usually try to sell a product; instead it gives a wide range of generic information about finances and pensions. This information could be used to make financial decisions, but will not be tailored to the specifics of your circumstances.
‘Advice’ is tailored to you. Financial advisers are regulated and specialise in giving advice tailored to suit the objectives of the person they are talking to.
As an aside, if an article is trying to sell a specific financial product, it is neither ‘advice’ or ‘guidance’; simply marketing.
Why seek professional advice?
20% of respondents said that they either planned to, or had already arranged to, seek regulated financial advice. The reasons given for doing so, included:
- Valuing the security of a professional opinion (16%)
- Wanting to know more about Inheritance Tax (IHT) liability (12%)
- Wanting support to make weighty financial decisions (8%)
These are all good reasons to seek professional financial advice. However, the research found that those who do take financial advice could be £13,000 better off. In addition, financial planning comes with a range of benefits, including:
- Advice which is personalised to your circumstances and needs
- Ongoing support to help you to reach your financial goals
- A structured plan which can lead to higher savings in the long term
- The ability to use tax-efficient saving methods to reduce tax liabilities and ensure that more of your money is yours to spend
- A sound understanding of how changing laws and legislation can affect your finances
- Increased confidence in your decisions
For more information, and to get personalised, professional advice regarding your pensions and savings, contact us on 0115 9338433.