In my position as Practice Manager there is a lot of information that I come across and one thing that caught my eye recently is a CPA report entitled “The Value of Advice”. The title suggests to me the report explores why we seek advice and the benefits of getting professional advice.
What drives us to get financial advice in the first place is a desire to be free from worrying about our finances and to feel in control. It turns out that the proportion of people that seek advice from their partner and parents is greater than the proportion of people that seek professional advice from any of the following: accountants, financial planners/advisers, tax agents and mortgage brokers. This suggests that people are satisfied with the advice they get from their circle of family and friends and don’t feel there is value in seeking professional help.
You could conclude from this that people who don’t get professional help (the “unadvised”) are just as happy and content as the people who do seek professional advice (the “advised”). It turns out there are some differences between the two groups and some surprising differences too.
When you start looking at the statistics, the evidence shows the true value of professional advice. For example, about three quarters of advised people are on track to have enough money for a happy retirement compared to just over half of those who were unadvised.
What I found surprising is that there is a range of intangible benefits for the advised. Around 4 out of 5 people reported greater financial security, almost half reported mental health benefits, a third said their family life improved and a quarter said their social life improved.
On a national level, if everyone received professional advice then there is a potential $10.4 billion per annum saving to Age Pension expenditure. Even at a more realistic uptake level of 50% there is a $1.9 billion saving, not to mention all the intangible benefits.
So why don’t more of us seek professional advice? Lack of trust comes up as an issue followed by people feeling that they can look after their own financial affairs. Remember, this is despite half of unadvised group saying they were not on track to retire happily.
To conclude I think I can say there is a lot of value in seeking professional advice. If you are sitting on the fence or even if your finances are in order, I hope this encourages you to take action and seek professional advice. We are always keen to listen to people and help them achieve their financial goals. I leave you with one of my favourite sayings: “The best time to plant a tree was 20 years ago. The second-best time is now.”