By Alan Steel
According to new research, the clients of financial advisers can be much better off in retirement than those who take financial decisions by themselves.
No surprises there.
But it’s good to hear when people quantify that statement with statistical information.
And that conclusion also pays heed to the problem of advice-less knee-jerk reactions by individual investors to short-term market movements.
Unfortunately that research, from Dunstan Thomas, or at least the person who wrote it up, has suggested that “those who take advice can hope to be almost two-fifths per year better off in retirement than those who don’t.”
Now maybe it’s my calculator that’s broken here, but the numbers (below) don’t match that sum.
Here’s what I mean:
If the survey found adviser-based clients could on average hope for a total post-retirement, pre-tax household income of £33,557.45, compared with £20,373.40 for those who have made all their retirement income provisioning decisions alone, then they got the “better off” bit wrong.
Those figures actually mean that folks who take advice are almost 65% better off than those who opt not to, instead of the 40% they suggest.
Makes you wonder if the guys doing this research and writing the article shouldn’t have taken some advice themselves from an IFA beforehand.
But the really amazing thing here is how the survey showed only one in five would-be investors actually bother going to an IFA for help.
The rest prefer to do it themselves on the cheap and end up watching those who actually can be arsed to get some advice 65% better off every year in retirement.
And that’s after costs!
What’s that about leading a horse to water…?
It’s crazy. In fact, it’s “Still crazy after all these years”- Paul Simon
So get some advice.
Because after all, it’s your money we’re talking about here.