Recent research suggests that people who do not take financial advice were overconfident in their own financial planning abilities and could miss out on the tangible and intangible benefits that advice delivers.
The research found that those who fail to ask for advice may be overlooking the fundamental elements of financial planning, such as having clear goals or even being sure what they are saving for.
However, of those who took professional advice, more than 50 per cent said they were confident about deciding a retirement date compared to just 29 per cent of those who were not.
Interestingly, the main barrier to seeking professional advice appears to be people’s self-belief in their own abilities to manage their finances, even though 80 per cent of those surveyed admitted that they fail to plan for the future.
According to the research, more than half of respondents felt confident in deciding on a car or home insurance product without taking advice, while just over half were confident about deciding on a savings product.
As one of the report’s authors commented, while there is something to be said for ‘DIY’ financial planning, there is a lot to consider when managing one’s finances and making important financial decisions that can have lifelong implications, which is why working with a financial adviser makes sense.
He added that decisions on spending, saving and investing can be complex, made more intricate by pension freedoms and poor decisions can mean putting financial futures in jeopardy. However, taking professional financial advice can give peace of mind.