Mental wellbeing, better financial resilience and improved quality of life are the three key benefits of taking professional financial advice or broader financial guidance, a new study by St. James’s Place (SJP) reveals.
However, perceived barriers, including people believing advice is simply not for ‘people like me’, are preventing up to 11 million people in the UK from seeking support.
SJP’s Real Life Advice Report, the first chapter of which launches today, surveyed just under 12,000 individuals to understand how financial advice and guidance of all forms impacts individuals and families across the UK – and explored the perceived barriers that stand in the way:
o The relevance barrier – a third (33%) say their personal situation is too simple to require advice.
o The perception barrier – Nearly 1 in 10 (8%, rising to 14% of 18-34s) have not considered financial advice because they are not aware of its potential benefits.
o The timing barrier – 1 in 7 (14%) of those aged 18-34 and 1 in 20 (6%) of those over 55 believe it’s either too early or too late to take advice
Across the UK, 24.6m people have never accessed any kind of financial advice or guidance, according to the findings.
Mark FitzPatrick, CEO of St. James’s Place, said: “Financial advice and broader guidance can transform lives, but millions are not reaping the benefits because perceived barriers are holding them back. Many believe their circumstances don’t warrant advice, they’re unaware of how it might help them, or they feel it’s too early or too late to take that leap. As a result, they’re missing out on the improved financial and emotional wellbeing advice can bring.
“Too often advice or guidance is seen as only for the two extremes: for the very wealthy or for those in financial strife. We have to come together to break down these indisputable barriers.”
SJP’s research also explored the positive impact that financial advice and guidance has on people’s lives. Among those who receive financial advice or guidance in some form, more than four in five (84%) say this has benefitted them mentally or emotionally. This increases to 92% amongst those who receive ongoing financial advice from a qualified firm or individual: 33% feel more confident, 26% feel less stressed, and 25% feel less vulnerable.
Two thirds (65%) reported an improvement in their quality of life – rising to 75% for those who receive ongoing financial advice – with a more comfortable retirement (32%), the ability to afford larger purchases like holidays, home repairs and weddings (24%) and the ability to save more (25%) the top factors in this.
In addition, almost half (47%) say taking financial advice has enabled them to reach a specific life goal or tackle one of life’s hurdles. This increases to three in five (58%) among those receiving ongoing financial advice. This includes:
o Owning own home, upsizing and paying off mortgage – 28%
o An inheritance for children – 19%
o Divorce, bereavement, redundancy – 13%
o Starting/ expanding family through IVF/ Adoption – 8%
The study also shows that advice can have a significant impact even when people have more modest savings pots. When asked how advice has benefitted them mentally and emotionally, people with less than £20,000 in financial assets reported having a better understanding of their finances (30%) and feeling less vulnerable (24%). Meanwhile for those with higher levels of savings and assets (over £100,000) the main benefit they’ve experienced is feeling more confident around their financial future (38%).
Mark FitzPatrick, CEO of St. James’s Place, said: “While more advice or greater access to financial guidance won’t solve all of the challenges people face today, it can help people from all walks of life to establish a sense of financial control. The FCA’s proposed Advice Guidance Review is a real opportunity to increase access to support and a moment to come together more widely to find solutions to the increasing pressures we face on our future finances.
“At a time when the wealth gap between the generations continues to grow, the first rung of the housing ladder feels further out of reach and the responsibility for our retirement falls more firmly on our shoulders, our industry must do more to break down the barriers and connect people with the support they could benefit from. Until we do this, millions will stop short of aspirations that are well within their reach.”
To help people overcome the barriers and benefit from financial advice, SJP is calling for focus on the following actions:
o Close the gap between guidance and full holistic advice. Regulatory change through the Advice Guidance Boundary Review is a critical opportunity for change and momentum must be maintained on this issue to improve the help available to people. Targeted Support must be designed with consumers’ interests at heart; helping people make the right decisions for their finances. This should be underpinned by enhanced financial education for young people.
o Train more advisers. The number of financial advisers has remained consistent for the last decade, at approximately 28,000 both in 2010 and in 2024, according to FCA data. To encourage more people to seek advice, more talent – from all age groups and walks of life – must enter the industry. Through its Academy, SJP is committed to introducing hundreds of new professionals into advice every year.
Over the coming weeks, St. James’s Place’s Real Life Advice Report will explore the benefits of accessing financial advice or guidance through diverse real-life stories from its Partners and clients. The report, which will be released in a series of chapters, aims to highlight how financial advice and guidance can benefit everyone.
