January 19th, 2021
3 ways that getting financial advice can actually support your mental health
If you have been struggling with your mental health recently, you aren’t alone. According to a study by insurance provider Aviva, around one-third of UK adults aged 45-54 feel that their mental wellbeing has suffered due to the pandemic.
The disruption that the coronavirus outbreak has caused to our everyday lives has negatively impacted many people’s mental health. One of the biggest issues it has caused is the heightened anxiety about money, with millions of people having been made redundant or furloughed.
However, studies have found strong links between receiving financial advice and improved mental wellbeing. Read on to find out why seeking financial advice can actually support your mental health.
Clients who have been advised have a better understanding of financial products
One of the clearest benefits of receiving financial advice is gaining a greater understanding of your finances and financial products.
According to a report by Royal London, individuals who had received advice reported a much greater understanding of financial products and issues than those who had not. This translated into lower levels of anxiety and greater confidence, as financial decisions which may have seemed complicated were now much easier to understand.
Having a greater understanding of financial products can also enable you to make better-informed decisions about your finances, which can help you to grow your wealth more effectively.
Another study by the International Longevity Centre (ILC) found that clients who received professional advice between 2001 and 2006 saw a boost to their total wealth of £47,000 over the course of a decade.
One of the main reasons behind this growth was the confidence that clients felt following advice, which made them feel more able to take greater risks with their investments. The study found that this greater tolerance to risk translated into an increase of £31,000 in pension wealth and £16,000 in non-pension wealth, on average.
Working with a financial adviser can give you more confidence in your decision-making and emotional security in the knowledge that you’re better able to take risks to grow your wealth.
Receiving financial advice can impart greater feelings of confidence and control
One of the biggest ways that the pandemic has negatively affected mental health is by the disruption it has caused to many people’s finances. According to a study by insurance provider Aviva, almost two-fifths of Brits have reported trouble sleeping due to financial worries caused by the pandemic.
If you want to gain more control over your finances, speaking to a financial adviser can help you to avoid sleepless nights. As the Royal London study highlights, two of the biggest benefits of seeking professional advice were the greater feelings of control and peace of mind that you can gain from it.
Source: Royal London
As you can see from the charts, receiving financial advice makes a noticeable difference in improving feelings of control and stability. It also has a marked effect in reducing anxiety, something which can be essential for mental health at a time when the economic effects of the pandemic can make the future uncertain.
If you want to gain more control over your finances and lay many of your financial worries to rest, working with an adviser can be a great way to do so.
Regularly advised clients felt the emotional benefits more strongly
While receiving financial advice has many benefits for mental wellbeing, studies show that regular contact with your adviser can produce even greater effects.
The study indicates that individuals who know their adviser well or, better yet, speak to them regularly, have lower levels of anxiety as well as higher levels of confidence regarding their finances.
The study by Royal London found that individuals who had an ongoing relationship with their financial adviser felt more empowered to make well-informed decisions with their finances than those who only rarely sought advice.
This translated into greater feelings of financial stability and confidence that they could absorb economic shocks without them having a significant impact on their long-term goals.
Source: Royal London
Speaking with your adviser regularly may yield greater benefits because it helps you to build up trust much faster and more effectively than occasional meetings. According to the study, clients who rarely spoke with their advisers tended to view their interactions as more transactional than those who saw them often.
Knowing that you can trust your adviser can be a good way to reduce your financial anxiety and instil a sense of security that you’re making informed decisions with your finances in these uncertain times.