Financial advice improves emotional wellbeing – Royal London

Professional financial advice helps to improve the emotional wellbeing of customers on top of the expected financial benefits, new research from Royal London has suggested.

A new report from the retirement specialist, titled Feeling the benefits of financial advice, estimated that around 17 million people in the UK have received financial advice, with the vast majority feeling positive about their adviser and the services they provide.

For advised customers, Royal London revealed the most commonly recognised emotional benefits of their adviser’s services are having access to expertise, which makes them feel “more confident “in their financial plans. Other benefits included feeling more in control of their finances, and gaining peace of mind.

The research, based on findings among a UK nationally representative sample of 4,007 people, also showed that advised customers feel positive about the service they received – with the key areas of satisfaction being the quality of advice and expertise (82%), communication style (81%) and trustworthiness (81%).

Royal London’s research also suggested that customer satisfaction with advisers is even higher where there is an ongoing relationship in place.

“We have long suspected that the benefits of advice go far beyond financial gains alone and our research confirms that individuals who have received advice are more likely to feel confident about the future, and less likely to feel anxious or worried,” commented Royal London intermediary distribution director, Tom Dunbar.

“It’s easy to see why clients turned to financial advisers when the pandemic struck. But advice is most powerful – and most rewarding – when it goes beyond a one-off meeting. An ongoing relationship with an adviser amplifies the emotional, as well as the financial, benefits.”

The research found that 63% of people who received advice said they felt financially secure and stable, compared to just 48% who had not received advice. Four in 10 (41%) who had not received advice felt anxious about household finances, compared to just a third (32%) of those who were advised.

The research also considered how the COVID-19 crisis made non-advised customers feel about their finances, with 35% of respondents indicating they felt anxious about their financial situation, and 65% appreciating the value in being more prepared for life’s shocks.

“COVID-19 will have lasting effects on the nation’s finances for years to come,” Dunbar continued. “Now more than ever, households need the reassurance, expertise and confidence that professional advisers can provide to help them weather a difficult financial climate. The industry also has a responsibility to make sure more people are able to get the support they need.”

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