The importance of talking about your finances
The pandemic has shone a light more than ever on money worries that people may have and how important it is to get the right support. This week is Talk Money Week, highlighting the importance of talking about your finances.
Why is it important to talk?
Research shows that people who talk about money:
- feel less stressed or anxious and more in control
- make better and less risky financial decisions
- have stronger personal relationships
- help their children form good lifetime money habits.
Taking a DIY approach has risks
Research1 found that three in five people (60%) feel they can manage their own finances and do not feel they need help in making financial decisions. This may be because they prefer to keep things private and believe they will be able to find the right solution themselves easily over the internet. Worryingly, the under 25s are more likely to turn to social media for advice than to speak to a professional adviser. However, it’s important to remember the risks or ultimate costs of taking a DIY approach, particularly when it comes to making more complex financial decisions.
What does a Financial Adviser actually do?
We have previously written about the mismatch in the perception of what an Adviser does and the reality of our role. You can read our original blog here https://client.sandringham.co.uk/2021/06/07/what-does-a-financial-adviser-do/
We have tried hard to address this perceived mismatch by listening to our clients, to identify what they find rewarding and valuable when working with Sandringham. This is what we learnt https://client.sandringham.co.uk/2021/06/07/listening-clients-say/
Isn’t financial advice only for the very wealthy?
Further research2 indicates that a number of myths still exist, which could act as deterrents to seeking advice. Two in five people thought they weren’t wealthy enough to seek advice and 27% thought that advice is only for those with savings of over £100,000.
The reality is that 77% of those who have either sought advice or who currently have an Adviser, have savings and investments of less than £100,000, compared to just 5% with more than £500,000.
Understanding value
Cost is often quoted as a barrier to seeking advice but nine out of ten people3 said that they didn’t actually know how much advice costs, so this is very much based on feeling not facts. It’s worth considering both how you might benefit financially from seeking advice, as well as how you will save time and reduce stress, knowing that a professional is managing your finances.
According to a report by the International Longevity Centre4 Brits who took professional financial advice between 2001 and 2006 enjoyed an average increase in their assets of nearly £48,000 after 10 years, compared to those who took no advice. The benefits of advice were particularly significant for those with less disposable income, as well as for people who took advice more than once. The combined benefits of advice over the 10-year period work out as approximately 2,400% greater than the initial cost of the advice.
Helping you with important decisions
We understand that it can be difficult to talk about finances. Your Sandringham Advising Partner can listen to you, review your options and tailor make plans specifically to your individual needs.
Don’t just take our word for it!
Our consistency in protecting and enhancing our clients’ lives is demonstrated by having been awarded the prestigious Top Rated Large Firm Award by VouchedFor, multiple times.
‘an exemplary commitment to transparency and consistent delivery of excellent client outcomes.’
1 OpenMoney
2,3 Aegon
4 ILC
Sources
