The technology firm found people taking financial advice stand to have a pre-tax household retirement income 39 per cent higher than those who make their retirement income decisions alone.
Advised savers can hope for a retirement income of £33,577.45 on average, while those going it alone can face a hit of £13,204.05, reducing anticipated retirement household income to £20,373.40, according to the research.
A report published by the International Longevity Centre and Royal London in July had already found people who receive financial advice are on average £40,000 better off than those who do not.
Dunstan Thomas commissioned a study of 1,002 baby boomers nationwide during the summer of 2017.
It found two-thirds (66 per cent) of baby boomers had no financial advice at all on their retirement income building or decumulation journey.
While 23 per cent planned to use an adviser to help them plan their income to ensure they do not run out of money in retirement, the majority did not consider that option.
About 15 per cent planned to rely on guidance from their provider instead.
The study said: “We think we have exposed one of Donald Rumsfeld’s famous ‘unknown unknowns’ here. People frankly don’t know how they are going to adjust the risk profile of their investments pre-retirement because they simply don’t know the importance of doing so.
"As the former US secretary of defence went on to say, it’s the unknown unknowns that tend to be the difficult ones.”
Dunstan Thomas detected a similar story in the field of inheritance tax planning where more than half (54 per cent) of baby boomers said they had no intention of going to an adviser for help.
This is despite inheritance tax receipts reaching record levels, according to HM Revenue & Customs, with £4.8bn collected last year and £6.5bn projected to be raised in 2022 to 2023.
Surprisingly, baby boomers were also found to be turning away from bank branches as a source of reliable retirement advice or guidance, with more than two-fifths (44 per cent) disagreeing with the idea of going into a bank branch for retirement planning.
The study found some evidence the pension freedom reforms had triggered greater interest in taking both advice and guidance.
But it also found a third (36 per cent) of the people interviewed could not differentiate between regulated advice and guidance, while a mere 17 per cent claimed to fully understand the difference.
About a third (29 per cent) of baby boomers still appeared to be baffled by the range of pension freedom choices.
As a result, one in 10 were leaving the asset selection decision making entirely to their provider with a view to buying an annuity from them, while one in five were planning to look at adjusting their portfolio 12 months before decumulation, which may be too late, the report stated.
The reliance on providers chimes with findings from the Financial Conduct Authority's retirement outcomes review, published earlier this year, which found consumers who access their pots early without taking advice typically follow the ‘path of least resistance’, accepting drawdown from their current pension provider without shopping around.
The FCA's review found consumers are increasingly accessing drawdown without taking advice. Before the freedoms, 5 per cent of drawdown was bought without advice compared to 30 per cent now.
Contrary to commonly held beliefs the answer to engaging the baby boomer generation with financial help might be digital, the report found.
The study found baby boomers are considered to be "digi-active", with many spending more than three hours a day or 23 hours per week online, some even up to six hours a day.
Three-quarters (75 per cent) own a smartphone, 73 per cent a laptop, 59 per cent a tablet and 28 per cent an eReader.
Young boomers (aged 54 to 59) were found to be a great deal more active on mobile devices than the oldest (66 to 71), however.
That said, almost two-thirds (61 per cent) of all boomers agreed with the idea of doing more research into retirement options and products on the internet, with 19 per cent prepared to do retirement planning online, including participating in online web chats and viewing educational videos online.
Adrian Boulding, director of retirement strategy at Dunstan Thomas, said: "This report should give providers food for thought in terms of where they have opportunities to engage with their customers pre, at and once in what is quickly becoming a ‘phased’ or stop start-style retirement journey.
"Retirement savings is a far less certain world for baby boomers reaching state pension age over the next 15 years or so. They now have more retirement income options at-retirement and many are making retirement decumulation decisions later.
“In addition, they are less likely than ever to have access to regulated financial advice. All these factors combine to create a massive opportunity for providers to engage with their customers and help them navigate these changes using new digital tools, portals and platforms and the Pensions Dashboard in the future.
"If they don’t grab this opportunity others will, and the regulator will force modern, smarter consumer communications requirements on them anyway.”
carmen.reichman@ft.com
