7 researched benefits of financial advice

by Andrew Newman
in General
11 Dec 2009 | 4 Comments

People who received financial advice saved $2,457 more each year than those who had not received financial advice, according to a recent KPMG Econtech research report.

This suggests that people receiving financial advice

could be $49,140 better off over 20 years.

The report, conducted on behalf of the Investment and Financial Services Association, also estimated how the prospect of more Australians receiving financial advice could benefit the wider economy.

The 7 benefits of financial advice from the report are summarised below:

Provision of an individual wealth management strategy.
A reduction in risk through diversification.
A better match between an individual's risk profile and asset selection.
Financial discipline.
An average increase in personal savings on average of $2,457 per annum.
At a national level, the ability to reduce the dependence on foreign financing of domestic capital, could lower the risk premium for investment in Australia.
At a national level, increased national savings has the potential to reduce the current account deficit. Remaining finances mean higher investment and capital stock gains, in turn supporting gains in GDP.

Sourced from Investment and Financial Services Association ‘Value Proposition of Financial Advisory Networks'.

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Important Information

Information provided in this newsletter is general in nature and does not constitute financial advice. While we have taken reasonable care in providing this information, it should not be construed as being specific to your investment objectives, financial situation or particular needs. It's important for you to consider these matters before making any financial decision and we recommend you seek financial advice.

Comments (4)

In a similar way, the value of the financial advice I provide my clients with, will have a positive impact on their financial security and wealth, which in turn results in greater wealth at a national level.

11 Dec 2009, Andrew Newman, www.cmpfinancialplanning.com.au

Just in case anyone were to think that your example is "outrageous and impossible", let me give another example: If I were looking at a prehistoric fossil in a museum I could say, "If that fossil had not existed, then I would not have existed!" Once you start thinking deeply about the "butterfly effect" you can never see existence in the same light again. One encouraging aspect of it for me is that even the smallest good thing I might do could eventually have a massive good effect on the universe.

11 Dec 2009, Jim Noonan, www.jimnoonan.com.au

Thank you for your feedback Jim.

Very interesting to think of the "butterfly effect" with respect to the national level.

The definition of "butterfly effect" for those who haven't heard of it: the scientific theory that a single occurence, no matter how small, can change the course of the universe forever. A famous example is: the flap of a butterfly's wings changed the air around it so much that a tornado broke out 2 continents away.

11 Dec 2009, Andrew Newman, www.cmpfinancialplanning.com.au

Your "national level" perspective is interesting. It reminds me of the old "butterfly effect", as it is called, in that "national" affairs always come down to the behaviour of individuals.

11 Dec 2009, Jim Noonan, www.jimnoonan.com.au

7 researched benefits of financial advice

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