Part 5 of our thought provoking report 'Redefining Retirement: Pensions Freedoms. Pensions Future'.
Question 4 - Unadvised risk
What is the risk of not taking professional advice?
Having identified the retirement dilemmas clients are facing, the final question to successfully address them centres on the value of professional advice.
Retirement decisions can be irrevocable, so poor planning can have catastrophic implications.
Given the range and complexity of the options now available at retirement, the risk for clients acting without regular, consistent professional advice is now even greater than ever. No other approach can provide the bespoke and tailored solutions that can be continually adapted throughout the client’s lifetime.
Earlier this year we commissioned YouGov to survey over 1,600 adults on their thoughts on retirement and financial advice. The results, released in September 2015 bear out our belief that advice is crucial. (Old Mutual Wealth Redefining Retirement report)
The top five benefits of financial advice reported by respondents to our research were:
1. Peace of mind
2. Finances that are efficient for tax purposes
3. Achievement of financial goals
4. Protection against losses
5. Being better off financially
Research highlights the benefit of advice
Pre-retirees often have unrealistic expectations about the amount of income they will have available in retirement. Our research shows that there is an average 32% shortfall between expectation and reality.
Impact of financial advice on retirement income
Those retirees surveyed who did not have a target income, achieve an average of just £18,138 a year.
Retirees who saw a financial adviser saw their average income in retirement increase to £24,797.
Those who saw an adviser and also had a target saw their income increase further to £27,736.
Next article - New advice opportunities
The Redefining Retirement report covers key conversations and opportunities for you to help guide clients through the evolving retirement landscape. Visit our website to find out more about our new retirement proposition, IncomeSelect.