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Financial advice ‘intrinsically linked’ to good mental health

Financial advice ‘intrinsically linked’ to good mental health

Financial advice is “intrinsically linked” to improved mental health, a study has found.

Nearly three quarters (74 per cent) of UK adults who have sought regulated financial advice are more likely to have average or above average mental health, according to research conducted by HSBC’s insurance business.

Of those who don’t seek advice, 42 per cent said their mental health has slipped below average.

The pattern is similar for those who engage in ongoing financial planning. Nearly three quarters (72 per cent) of people who review their financial plan annually benefit from average or above average mental health, whilst half (50 per cent) of those without a financial plan said they have below average mental health.

And the same again was true for those with a plan for retirement. The study found more than three quarters (77 per cent) of people with a ‘comprehensive’ retirement plan had average or above average mental health.

This compared to those without a plan, of which almost half (48 per cent) felt they had below average mental health.

“Our study [of 3,000 UK adults] confirms that financial fitness is intrinsically linked with health and wellbeing,” said HSBC Life UK’s chief executive Mark Hussein.

“Making small changes to your financial planning today can not only have a big impact on your current wellbeing, but also improve your overall health, especially both physically and more importantly mentally in the future.”

But a major barrier to financial advice is still cost. 

A recent report published by OpenMoney calculated 6m people (up from 5.3m last year) wanted advice in 2021 but thought it cost too much.

HSBC isn’t the first to acknowledge a link between mental health and financial wellbeing. Others in the industry have been joining the dots of late.

In September 2020, the Association of British Insurers' announced a set of new mental health standards which has consequently seen the trade body train 5,000 advisers and staff on mental health.

But it isn’t just the mental wellbeing of clients which deserves advisers’ attention. In February, the Personal Finance Society called on the industry to prioritise its own mental health alongside that of clients, after it emerged the majority of advisers have felt the impact of the pandemic on their wellbeing. 

And as recently as last month, the mortgage industry came together to launch a mental health charter, providing a framework for firms looking to support their staff’s mental health.

This followed just one month after the Chartered Institute for Securities & Investment’s newly appointed Liverpool president pledged to use her presidency to raise awareness around mental health.