Consider the benefits of financial planning. If the first advantage that comes to mind is the opportunity to grow your wealth, you might be overlooking some of the intangible benefits that could improve your wellbeing.
Last month, you read about the potential financial benefits of working with a financial planner and how it could help you reach your goals.
Now, read on to learn more about some of the wellbeing benefits. While intangible benefits can be harder to quantify, they are just as important and might be something you value as much as growing your wealth.
1. Working with a professional could offer you peace of mind
A report in Professional Adviser suggests that one of the key reasons many people use a financial planner is the peace of mind it offers. In fact, in a survey of people with more than £300,000 of investable assets, more than half said this was important to them.
Worrying about your finances may affect your mental health. A survey from Standard Life found that 47% of women and 33% of men feel worried, anxious, stressed, or overwhelmed due to economic uncertainty.
A financial plan can help you focus on what you want to achieve in the future and the steps you might take to provide security, even if the unexpected happens. As a result, it could support your overall mental wellbeing.
2. A financial plan could improve your knowledge and confidence
Having someone you trust to turn to when you have financial questions could take a weight off your mind, and it could boost your finances too.
According to research from Moneybox, two-thirds of UK adults are, on average, £65,000 worse off because of low levels of financial confidence and knowledge.
The study found that less than a third of people claim they are very confident when managing finances. What’s more, 64% said they have missed out on financial opportunities in life – 35% blamed a lack of financial knowledge and 29% cited low financial confidence.
When asked why they struggled to manage their finances, the participants said they didn’t know where to start, found the topic overwhelming or struggled because of jargon. Yet, just 14% had spoken to a financial planner.
Working with a financial planner could mean you feel more confident about the steps you’re taking.
3. A financial planner could give you more time to focus on what’s important
Ensuring your financial plan remains on track and continues to reflect your circumstances can be time-consuming.
As well as keeping on top of your finances, factors outside of your control could also affect your financial plan. For example, if the government made changes to tax allowances, it could potentially lead to a higher tax bill or an opportunity to improve tax efficiency.
When you’re working with a financial planner, you can rest assured that your finances are in safe hands and focus on what’s most important to you.
4. You’re more likely to reach your goals with a clear plan
Only 17% of people in the UK have a plan to achieve their long-term money goals, according to data from the Aegon Wellbeing Index. In addition, only a quarter of people surveyed said they have a concrete vision of the things and experiences their future self might want.
If you don’t clearly outline your goals and how you’ll achieve them, it can be difficult to measure your success and stay on track. Understanding what you want to achieve now and in the future is an integral part of financial planning.
While you might link effective financial planning to growing your wealth, that’s not always the case. Indeed, in some circumstances, your plan might involve depleting your assets to allow you to reach your goals. For instance, when you retire, you’re likely to switch from accumulating wealth to turning your assets into an income stream.
A financial planner can help you assess how to manage your finances with your goals in mind.
Contact us to talk about your financial plan
If you’d like to discuss how a financial plan could support your wellbeing and help you create a path to reaching your goals, please contact us to arrange a meeting.
Next month, read our blog to discover how financial planning could lead to you making decisions that align with your aspirations and deliver even greater value.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.