Many over-50s reckon they need a £500,000 “windfall” to make financial advice worthwhile, research by The London Institute of Banking and Finance and Seven Investment Management (7IM) has suggested.
Professional Advisor reports that the survey of more than 2,000 UK adults found that, while just half (53%) of Britain’s over-50s felt well-prepared for retirement and two-fifths (38%) said they worried about it, most believed they needed a significant sum of money in order to seek advice.
Women were more reluctant than men to consult an adviser, according to the research – the advice tipping point for most men was £499,171, but it was £544,249 for most women.
The findings also showed nearly half (47%) of those who shunned professional advice thought they could look after their money, with another 28% saying they did not have enough to justify an adviser, and a similar amount (28%) saying costs were too high. One in five (19%) said they would never consider getting financial advice, regardless of how much money they might have.
7IM private client manager Michael Martin added: “This is the first generation that is really having to confront the double whammy of longevity and diminished pension returns and for some it’s proving painful.
“They started out their careers dreaming of packing in at around 60 but many now face going till they are 70 – and often longer. There are a number of steps savers should consider to address this problem and one of them is taking a sensible amount of investment risk.”
London Institute of Banking & Finance dean Peter Hahn said: “Statistically, a 50-year old Briton is expected on average to live to 81 so most will have to fund a minimum of 14 years in retirement.
‘Poor understanding of risk’
“That means having a long-term investment strategy with less inflation-exposed cash – a balance many may not be confident about. So while over-50s say they feel well prepared, these findings suggest a poor understanding of long-term risk and reward, risking poorer retirements.”
Nor do people need a £500,000 ‘windfall’ to make advice ‘worthwhile’, Hahn stressed, adding: “Advice can be really helpful in all sorts of circumstances and with much smaller ‘pots’ of money and assets.”
(Story source: Professional Advisor)