Aegon Financial Wellbeing Index confirms positive relationship between financial advice and wellbeing but highlights client money mindset as an opportunity for advisers

A major new study from pensions and investment company Aegon UK identifies the impact of financial advice on financial wellbeing. It also highlights the opportunity for advisers to improve their clients’ financial wellbeing by addressing their money mindset, rather than just their money.


The report reveals that just 10% of people who have never had any financial advice are fortunate to combine healthy finances and a positive money mindset, compared to 44% of those who have an ongoing relationship with a financial adviser and 23% who have occasionally used a financial adviser.

However, the report also highlights that the positive correlation between advice and financial wellbeing stems mainly from advisers helping their clients accumulate wealth; not necessarily because they make them happier. Those with a financial adviser were more likely to have high levels of wealth (e.g. through income, property or investment returns). But they were not always more likely to know what gives them joy and purpose in life or have a concrete and meaningful connection to their future / future selves.

This indicates that advised clients have more wealth, but they’re not necessarily likely to know what makes them happy which implies they are more focused on accumulating wealth for the sake of having more money; but not necessarily more happiness. This highlights an opportunity for financial advisers to future-proof their relationships with clients by influencing their financial wellbeing on a deeper level.

Advised clients report healthy finances

The report found that the average advised client reported nearly three times as much in pension savings at £246,000 compared to £95,000 for non- advised people. This pattern was repeated across a range of metrics with advised clients reporting total non-pension savings of £65,000 versus £32,000, and lower unsecured debt at £3,700 versus £6,400.

Advised clients not significantly better on mindset factors

However, when it came to mindset factors the gap narrowed. 22% of people with a financial adviser have only a vague sense of what gives them joy or purpose, despite this being a significant factor in influencing how people should think about prioritising their finances. This was better than the non-advised population (32%), but not significantly so.

Only 9% of those without an adviser have a financial plan that stretches over at least 10 years compared to 34% of those with and adviser.

While around three-quarters of those with an adviser agreed they had a financial plan, only 44% said they had a concrete picture of their future self (in ten years’ time), compared to 29% of the population as a whole.

Similarly, 11% of advised clients say that they frequently compare their finances to those who are better off than they are versus 17% of non-advised. This highlights that despite their relative wealth, many often feel dissatisfied with it or don’t have perspective on how well they are actually doing. This is significant as upward social comparisons (keeping up with the Jones’) are proven to negatively impact someone’s financial wellbeing.

Overall, the report highlights that there are benefits of getting financial advice to improve both the money and mindset sides of financial wellbeing. However, the real opportunities for advisers to improve the financial wellbeing of their clients lie in the areas relating to mindset.

Ronnie Taylor, Chief Distribution Officer at Aegon said, “Financial advice and financial planning in the UK is evolving at speed. There’s a growing movement towards looking at issues beyond building wealth.

“Behaviours, feelings and attitudes are gradually becoming more central to financial planning and advice. This approach doesn’t start with the money, it starts with the vision. The hopes, anxieties, relationships, influences alongside attitudes to life, family and work are all core to the financial wellbeing of a client and should be given as much attention than the amount of investible assets. Planning a financial future based on a client’s purpose as well as their financial needs is likely to lead to better financial wellbeing for both the client and your business.

“Insight like this can deliver a more fulfilling client experience with better outcomes for clients and long-term, valuable client relationships for advisers.

“And while we recognise that affordability is a common challenge for people seeking financial advice, it’s not the case for all financial advice. Protection is an example. For someone who likes to feel safe and wants to be prepared for all life can throw at them, the financial safety net protection provides could be a real boost to their financial wellbeing. And a client sharing sensitive information about their health worries and experiences is a firm foundation to build a long-term client relationship.”

Chris Budd, Chair of the Initiative for Financial Wellbeing (IFW) said, “Advisers and financial planners have a fantastic opportunity to combine happiness and fulfilment with wealth. If advisers were to integrate some focus on the mindset factors identified in Aegon’s Financial Wellbeing Index, they could influence and improve the overall financial wellbeing of their clients.

“It’s not something that will happen overnight, but by applying financial wellbeing theory to the advice process you can slow down the traditional solution driven approach to gain a true understanding of the money motivations of your clients for the best outcomes in terms of happiness and not just wealth.

“Whether encouraging clients to visualise their future self, or paying more attention to the experiences that give a client moments of joy and purpose and their attitude to financial plans, incorporating financial wellbeing practice into your financial planning and advice services is a sure way of strengthening your client/adviser relationship and future proofing your business.”


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