Financial advice can significantly boost the personal wealth of clients from all backdrops - including a 50% boost to pension pot - according to a study.
UK insurance company Royal Life alongside the the research department at the International Longevity Centre (ILC), aimed to quantifying the 'value of advice'.
The study entitled - "What it's worth: Revisiting the value of financial advice" - from the ILC analysed professional financial advice that was provided to members of the public in the UK between 2001 and 2006. It found that, holding other factors constant, those who took advice around the turn of the century were on average significantly better off than those who did not, a decade later.
ILC concluded that professional financial advice "can and does significantly enhance clients' wealth" and that this benefit occurs in a commission or a fee-based environment. It is potentially most valuable for less wealthy clients.
Paul Stanfield, pictured left, Secretary General of European advisory trade body FECIF, believes that the UK findings could also fit models in other countries.
"The study analysed professional financial advice that was provided to members of the public between 2001 and 2006," said Stanfield. "In other words, well before the onset of the UK's RDR and thus within a transparent commission environment, much like the rest of the EU now.
"This would suggest that the conclusions and findings are applicable across all Member States and beyond.
According to the research, the advice resulted in a total boost to wealth (in pensions and financial assets) of £47,706 by 2014/16. This wealth "uplift" from advice comprises, on average, an extra £31,000 of pension wealth and over £16,000 extra in non-pension financial wealth.
Stanfield added that one conclusion often drawn with regards to the efficacy of financial advice is that the benefits are mostly experienced by wealthier clients. "This research would seem to dispel that myth," he said.
"A key finding is that the proportionate impact of taking advice is greater for those of more modest means. As the ILS explains: "For the ‘affluent' group identified in the research, the uplift from taking advice is an extra 24% in financial wealth.....compared with 35% for the non-affluent group. "On pension wealth, the uplift is 11% for the affluent group compared with 24% for the non-affluent," he added.
It was also seen that those who were still taking advice at the end of the period had pension pots that were, on average, 50% higher than those who had only taken advice at the beginning of the period - albeit that this result was not controlled in the same way.
This result comes from detailed analysis of the government's Wealth and Assets Survey which has tracked the wealth of thousands of people over two yearly ‘waves' since 2004-06.