Major life events or milestones are the biggest prompts for people to seek financial advice or guidance, a new study by St. James’s Place (SJP) reveals.
Almost half (48%) of those who have accessed advice or guidance – 12.5m people – did so following a key moment such as buying a property, getting married, or dealing with an unexpected change like divorce.
The second chapter of SJP’s Real Life Advice Report, launching today, explores the triggers that drive people to seek professional financial advice or wider financial guidance. Collectively, life milestones are the most common prompts:
• Reaching a certain age – 17%
• Buying a property – 15%
• Receiving an Inheritance – 12%
• Retirement – 10%
• Getting married – 10%
The study, which surveyed just under 12,000 individuals, also highlights that unexpected change and challenges are key drivers of financial advice or guidance. More than one in ten (12%) sought support following a change in job status, such as promotion, career change or redundancy, 6% following divorce and 6% following caring for loved ones. Serious illness and becoming a single parent were triggers for others (both 5%).
Alexandra Loydon, director partner engagement and consultancy at St. James’s Place, said: “Big life events and milestones make people stop, assess and plan, and often they prompt people to undertake some financial planning too. While it’s clear that one of the greatest benefits of financial advice or guidance is the support it can offer in times of change or stress, the key to navigating those moments is putting a strong financial plan in place ahead of time. Seeking the support to do so not only boosts mental and emotional wellbeing, but provides the confidence to reach life’s goals and milestones in the first place.”
Cost of living crisis is single biggest driver of financial advice or guidance
While life events and milestones are collectively the biggest reason that people seek financial advice or guidance, SJP’s research found that the single biggest driver was the cost-of-living crisis, with 18% accessing support due to this. Other macro trends also prompted action, with 13% seeking support due to changes in the economic environment, 10% as a result of high mortgage rates, 7% following policy changes and 5% after a change of government.
Meanwhile, for just under a fifth (18%) of those who have taken advice or guidance, seeking help was the more positive consequence of accumulating a savings and investment pot large enough to warrant it – rising to 27% to those that are currently receiving ongoing financial advice.
Referrals and recommendations are also common prompts for taking advice or guidance, with 15% of those who have received advice or guidance doing so following a personal referral, and 8% because they had a family adviser.
Younger generations more likely to seek support to navigate complicated issues
SJP’s research also reveals that the reasons why people first take financial advice or guidance are changing. Those aged 55 and over were largely prompted by more simple reasons, with one in five stating it was either because they’d reached retirement (21%), their savings had reached a certain level (20%), or they’d reached a certain age (20%).
In comparison, those aged 18 to 34 are more likely to seek support to navigate more complicated issues, as managing money continues to become increasingly complex:
• 24% have taken advice or guidance because they were worried about the cost of living (versus 8% aged 55 and over)
• 17% sought support to get on the housing ladder (versus 10% of over 55s) and 16% due to concerns around high mortgage rates (versus 3% of over 55s)
• 12% turned to advice or guidance to tackle how they support a loved one with care costs (versus just 1% of over 55s)
Alex Loydon continued: “Younger generations face a very different landscape to their parents and grandparents , from higher living costs and a tougher housing backdrop, to the decline in defined benefit pension schemes meaning greater individual responsibility for their retirement.
“This increasingly testing and complex backdrop means it’s even more important to be thinking about and taking action to build up finances as early as possible. Advice and guidance can help with understanding these issues, and with putting measures in place to ensure their money works as hard for them as possible, no matter what their circumstances are.”
