Australians who engage a financial planner have a better quality of life
Australians with an active relationship with a financial planner are not only financially better off than unadvised Australians – they also have a better quality of life, according to new research from the Financial Planning Association of Australia (FPA).
The study, conducted by research consultancy MYMAVINS, moves beyond the financial benefits of advice with the launch of the FPA’s inaugural Value of Advice (VoA) index.
The VoA Index compares perceptions of unadvised and advised Australians, measuring their quality of life, financial confidence and satisfaction. In the future it will provide a year-on-year comparison as to how Australians value financial advice.
The inaugural index findings reveal that advised Australians are significantly better off across the board than those who are not advised. Furthermore, those Australians advised by a CFP© adviser report demonstrably further improved outcomes.
The research further found that financial advice promotes a better quality of life and provides many other non-financial benefits. Two-in-five advised Australians believe professional advice has benefited their family life (41%) and mental health (44%).
FPA Chief Executive Officer, Sarah Abood, says the study makes it undeniably clear that financial advice delivers benefits beyond the purely financial.
“Australians with an active relationship with a financial planner are better off in multiple ways. They suffer less financial stress, enjoy a higher quality of life, have more financial confidence, and are more satisfied with their wealth,” Abood says.
“Regardless of the client’s wealth or age, the study found advice promotes and enables better quality of life.”
Based on the study, the top 10 key benefits advised Australians received from a financial planner were:
“On average, advised Australians rate their overall life satisfaction at 7.3 out of 10, significantly higher than the 6.4 rating from the unadvised,” Abood said.
“Advised Australians are also significantly more likely to feel financially secure than those who are unadvised (85% vs 62%), and are more likely to feel very or completely satisfied with their current level of wealth (35% vs 18%).”
The study found that there is twice as much confidence among advised pre-retirees that they will have enough money for retirement (52%) compared to unadvised pre-retirees (26%).
Similarly, with advised early retirees, there is significantly greater confidence in having enough money for the rest of their retirement than those who are unadvised (63% vs 40%).
The research found that pre-retirees who have received financial advice are nearly twice as likely as those who have not, to expect at least a comfortable standard of living in retirement compared to those who are unadvised (41% vs 23%). Two-in-three early retirees who have been advised say they are living a comfortable or lavish lifestyle compared to only 1 in 3 of those unadvised (67% vs 33%).
Finally, advised clients with a CFP® professional benefitted more than clients of non-CFP® professionals (86% vs 78%).
“Advised clients of a CFP® professional benefit more than clients of non-CFP® professionals. They have the highest quality of life, the most financial confidence and are the most satisfied with their wealth,” Abood said.
With the cost of financial advice looming large for many Australians, the research found those who received financial advice thought it was worth every cent.
“Advised Australians overwhelmingly believe advice has made them tangibly financially better off and that its value outweighs the cost,” Abood said.
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