“If it could be shown, without a shadow of a doubt, that financial advice improves happiness, health and even personal relationships, would it change the way we judge the role of financial planning?”
This is the question at the heart of new research released today by IOOF, “The True Value of Advice” (the Research), which takes a deep dive into the emotional benefits of financial advice.
According to Renato Mota, General Manager of Distribution for IOOF, the findings redefine what successful financial advice looks like.
“Financial planners know that tangible financial outcomes matter to clients, and indeed our 2014 research, ‘The Expectation of Advice’, revealed that over three quarters of Australians define a successful financial planning relationship as one which allows them to achieve core goals and lifestyle objectives.
“Those findings still hold true, but this new research shows that financial advice is about so much more than just financial outcomes, in fact it sheds new light on traditional thinking and the way we measure the value of financial planning,” he said.
Mr Mota went on to say that the Research uncovered significant emotional benefits experienced by Australians who receive professional ongoing financial planning advice.
“Respondents with ongoing professional financial planning had 21% more peace of mind about their financial future, and 20% increased feelings of financial security.
“What was surprising however, was how much financial advice impacts happiness generally –respondents reported 13% greater levels of overall personal happiness.
“Clearly overall personal happiness and financial planning are inextricably linked, and financial planners play a role in their clients’ lives far beyond improving financial management and investment returns,” Mr Mota explained.
“Financial planning improves happiness, health and personal relationships in very concrete and tangible ways, and financial planners who embrace this new paradigm will be the ones to succeed.”
In conclusion, Mr Mota said that what is needed now is a new approach for financial planners, anchored in the knowledge that financial control and security leads to significant emotional benefits.
“IOOF stands ready to help financial planners look at the big picture, re-assess how they interact with clients, and embrace a holistic approach to financial planning.
“Because that’s the true value of advice,” Mr Mota said.
Key statistics from IOOF’s “The True Value of Advice” research
Respondents who receive ongoing financial advice experience:
· 13% greater levels of overall personal happiness
· 21% overall increase in peace of mind
· 20% increased feeling of financial security
· 17% increased level in confidence that their core goals will be achieved
· 76% of respondents believe achieving core goals and lifestyle objectives defines a successful financial planning relationship
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