Improved financial wellbeing key factor in alleviating stress 

According to research by the Financial Standard Planning Board (FPSB), clients of a professional financial planner experience a higher quality of life, financial confidence and satisfaction (75 per cent) than those unadvised (71 per cent), with 83 per cent of advised respondents saying they were feeling financially secure opposed to 74 per cent of unadvised.

The FPSB research looked at three key areas across both respondents who were advised by certified financial planning (CFP) professionals and those who were unadvised. 

It found that CFP professional clients have greater life satisfaction and feel like they can cope with health issues better than their unadvised counterparts, with almost 15 per cent more CFP advised clients feeling that their interests and involvement in life gave them a sense of meaning and purpose, compared to unadvised clients (73 per cent CFP vs 64 per cent unadvised).

The research, which marks World Financial Planning Day (October 4) was undertaken by FSPB with over 15,000 consumers across 15 global regions, including the UK.

Sally Plant, assistant director, financial planning and education development at the Chartered Institute for Securities & Investment (CISI), said: “This is one of the largest ever pieces of global consumer research undertaken, examining the benefits of financial planning and of working with a CFPM professional. 

“With many parts of the world experiencing economic strain and rising costs of living, it is more important than ever that we acknowledge that improved financial well-being positively impacts mental and physical health, and family life.”

The research revealed that professional clients are more likely to feel financially secure than unadvised consumers.

Improved financial wellbeing and peace of mind (37 per cent), financial decision-making confidence (38 per cent) and help in understanding financial matters (36 per cent) are considered key benefits when working with a financial planner.

Meanwhile, almost one in two clients said their family life (48 per cent) and mental health (48 per cent) have benefitted from seeing a financial planner.

“The research shows that financial wellbeing plays a key role in alleviating stress across generations, and that financial planning clients report an improved family and social life, and physical and mental health – the gym for the brain,” Plant said.

The research also found that advised women experience a significant value in financial planning (74 per cent) compared to unadvised women (57 per cent). 

Key myths

The global research uncovered a number of myths among consumers.

Around a third (39 per cent) of less affluent, unadvised consumers felt that financial planning could help improve financial wellbeing and peace of mind.

Additionally, less affluent consumers have the same need for financial planning, indicating that one of their top, unmet needs was to ensure they have regular money to live on (38 per cent).

All generations of advised consumers experience quality-of-life benefits, financial confidence and financial satisfaction, compared to unadvised consumers.

Value in respect of quality of life was noted by 69 per cent of millennial advised consumers (64 per cent unadvised millennials).

The report shows that millennials have many unmet financial needs, with ability to live a desired lifestyle (39 per cent) and ensuring regular money to live on (37 per cent) being top needs identified by millennials.

It explained that the value of financial planning delivers benefits that far outweigh its costs for advised clients, with the main reason many respondents remaining unadvised is feeling it's “too expensive” (30 per cent) followed by finding someone they can trust (29 per cent).

Most clients (8 in 10) also believe that financial advice provides more value than it costs and that it has made them tangibly better off.

The future of financial planning

Looking ahead, the research found that 75 per cent of millennials currently use apps or websites to manage their finances.

The wealth transfer means that more than half of millennials (53 per cent) expect or have already received an inheritance or major financial support, with two in five of them expecting this to come in the next five years.

Millennials are just as likely to seek financial support from a planner (41 per cent) as from friends and family (43 per cent).

The biggest trigger for millennials to consider seeking advice from a planner is taking control of their money (35 per cent), followed by buying a property (32 per cent) and receiving an inheritance (31 per cent). 

Barriers for millennials include cost (32 per cent) and trust (29 per cent).

FPSB explained that if using a professional financial planner, 92 per cent of millennials respondents expect to have digital platforms available to monitor their investments and goals. 

They are also most likely to have taken up or to consider online asset trading, with 21 per cent trading since 2020 (11 per cent Boomers and 14 per cent Gen X).

The majority of those with crypto investments intend to invest more in it – 62 per cent of Boomers, 57 per cent millennials and 56 per cent Gen X.  

The “fun factor” 45 per cent and “long term growth” 52 per cent are key drivers for millennials crypto investing. 

However, the majority, 53 per cent, of Gen Y consider crypto a “very risky investment”.

sonia.rach@ft.com

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