Those working with an IFA are twice as ready for retirement

Investment / Savings
Approaching Retirement
Joe Phelan's picture
Working with an IFA can significantly enhance retirement preparedness, research finds.

People who work with a financial adviser to organise and grow their finances are twice as ready for retirement as those who attempt to build savings without assistance, according to a recent study.

The research, carried out by John Hancock Retirement Plan Services, found that 70% of those that have worked with a financial adviser are either on track or ahead of target with regard to saving for retirement, while only 33% of those not working with an adviser said they felt they were achieving their pre-retirement financial objectives.

The study noted a huge disparity in financial knowledge when comparing those who have worked with an adviser and those who have not. Among those that have taken advice from an IFA, more than a third had determined how much they needed to save for a comfortable retirement, while only 14% of those without an adviser were aware of how much would be required.

Similarly, half of those that have spoken to an IFA admitted they have already started contributing to a retirement plan, compared to only 16% of those yet to seek financial guidance.

The results also established that among those currently working with or having previously worked with an adviser, 58% have a contingency fund in case of emergencies, while only 26% of individuals that have never contacted a financial adviser have money set aside for times of crisis.

We spoke to Sanjay Badhan, a top-rated IFA based in Swindon, Wiltshire, to get his take on why seeking financial advice has the potential to be so beneficial.

He said: “It is the role of a financial adviser to consider the big picture before giving any personalised advice or recommendations. We take into account the client’s current situation and their desired future position, and we are then able to ascertain exactly what changes, if any, need to be made to ensure they reach their financial target.

“By having greater exposure to the whole of the market and the plethora of schemes, services and products available, IFAs are able to use their expert knowledge to assess which options will give their client the greatest probability of success. By using an IFA, individuals stand more chance of being able to attain their financial goals, and often their objectives can be achieved far quicker than were the client to attempt to grow their money without assistance.”

We also approached and spoke to Michael Jackson, a top-rated IFA based in Glasgow, to discuss the research’s findings.

He said: “There are many benefits to working closely with a suitably qualified financial planner when approaching retirement. An IFA can ensure their client is confident that they will be able to retire comfortably and enjoy the lifestyle they desire when they finally do stop working.

“Financial planning can often be complicated, and by engaging with an IFA individuals can face up to decisions they may have otherwise shunned or avoided. A financial adviser can make a complex scenario simpler, and will help bring clarity to a range of confusing options.

“IFAs deal with the long-term financial aspirations of their clients on a daily basis, and so are adept at seeing the bigger picture. Sometimes, when attempting to deal with finances alone, it can be difficult to prioritise targets or put together an action plan that will ultimately ensure financial objectives are met. A financial planner who offers ongoing service which includes lifetime cash flow projections will be able to track and measure progress continually, thus holding everyone to account.”

Are you concerned about your financial situation? Do you want to know if you are on course to retire with a healthy sum of money that can support your desired lifestyle? Speaking to an IFA can help! To find a top-rated adviser in your area, search the VouchedFor database.

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