Professional financial advice can help people improve their emotional wellbeing by making them feel more confident and financially resilient, research shows.
The poll, carried out for Royal London, suggests that advised customers who have an ongoing relationship with their adviser are almost twice as likely to feel in control of their finances than those who do not.
Since the COVID-19 pandemic began, a third (35%) of people who have not taken financial advice feel anxious about their financial situation, the research shows.
Customers who have been advised and have protection products felt the emotional benefits of advice more than those who were advised generally.
Having protection cover in place made people feel more prepared for life shocks. One in five (20%) people who had protection felt less worried about what will happen to their family after they die compared to one in seven (15%) who were advised generally.
For advised customers, the most commonly recognised emotional benefits of their adviser’s services are having access to expertise, which makes them feel more confident in their financial plans, feeling more in control of their finances and gaining peace of mind.
The research also shows that advised customers feel positive about the service they received, with the key areas of satisfaction being the quality of advice and expertise (82%), communication style (81%) and trustworthiness (81%).
Customer satisfaction with advisers is even higher where there is an ongoing relationship in place. Similarly, the key emotional benefits are felt even more strongly when the customer feels they have a closer relationship with their adviser.
Around three in five (63%) who received advice said they felt financially secure and stable compared to just half (48%) who had not received advice.
Four in 10 (41%) who had not received advice felt anxious about household finances compared to just a third (32%) of those who were advised.
Lower income households who were advised also felt more in control of their finances (65%) compared to those that had not received advice (52%).
Similarly, only two in five (39%) lower income advised households worried about being able to cope financially when they retire in comparison to nearly half (47%) of households who are not advised.
A quarter of non-advised individuals said they would not know where to start when asked about life insurance (23%) or protecting against serious illness (24%).
In comparison, just 7% of those who are advised gave this response when asked about life insurance and 8% would not know where to start when asked about protecting against serious illness.
Tom Dunbar, Intermediary Distribution Director at Royal London, said it is “easy to see” why clients turned to financial advisers when the pandemic struck.
But he added: “Advice is most powerful – and most rewarding – when it goes beyond a one-off meeting. An ongoing relationship with an adviser amplifies the emotional, as well as the financial, benefits.
“COVID-19 will have lasting effects on the nation’s finances for years to come. Now more than ever, households need the reassurance, expertise and confidence that professional advisers can provide to help them weather a difficult financial climate.
“The industry also has a responsibility to make sure more people are able to get the support they need.”
Liz Field, Chief Executive of PIMFA, the trade association that represents financial advisers and wealth managers, said: “This important research from Royal London, once again demonstrates just how much difference that advice can make.
“However, many people believe that financial advice is out of their reach, or that it won’t make a material difference to their lives while also finding financial matters daunting or a cause of anxiety. There is a proven direct correlation between a person’s financial and mental wellbeing.”