Financial advice delivers quantitative and qualitative benefits, according to a just-published global survey.
The study commissioned by the Financial Planning Standards Board (FPSB) found advised individuals were demonstrably better-off across a range of metrics captured in a new index.
Released to coincide with World Financial Planning Day last week, the FPSB report says the survey of more than 15,300 people in 15 jurisdictions (including NZ) shows advice clients reported higher quality of life as well as greater financial confidence and satisfaction compared to non-advised counterparts.
The ’Value of financial planning index’ introduced in the FPSB paper also shows advisers with Certified Financial Planner (CFP) credentials outperformed those without the designation for all three factors in addition to a further category measuring advice client ‘experience’.
FPSB chief, Dante De Gori, says in the report that the survey presents “a compelling comparison between the personal experiences of individuals who navigate their financial journey alone, those who work with a financial planner, and importantly, those who seek advice from a [CFP] professional”.
De Gori, previously Financial Planning Association Australia chief, took over last October as head of the FPSB, which is the peak global body for the CFP designation.
The survey found that over 70 per cent of respondents who had never seen a financial planner would consider seeking professional advice – and about half of those intended to do so within the next three years.
However, while many unadvised people surveyed recognised the potential value of working with a financial planner about a third said advice was seen as too expensive and a similar proportion claimed it was ‘hard to find someone trustworthy’.
The FPSB study captured more than 1,000 NZ respondents with the unadvised cohort reporting less financial confidence on average compared to global equivalents, according to Financial Advice NZ chief, Katrina Shanks.
But Shanks, due to step down as head of the local financial adviser industry body next month, said in a statement that New Zealanders who worked with CFP-qualified professionals reported marginally higher confidence than the broader global average.
“We supported the global research as we know that financial planning makes a difference to New Zealanders lives and we wanted independent research to support this position,” she said.
Shanks, a former National Party MP, took the helm of the-then newly minted group in 2018 as it merged three advisory industry bodies into a single entity. The FPSB survey was carried out by Sydney-based researcher, Mymavins.
Last month the 10th annual Russell Investments ‘Value of an adviser’ study found professional advice potentially added almost 6 per cent to NZ investors’ portfolios over the last 12 months.