If you've ever googled whether financial advice is worth the money, you've met the £47,000 claim. It comes from a real study — Royal London and the International Longevity Centre, using the government's own wealth survey — and it found that people who took financial advice between 2001 and 2006 were on average £47,706 better off a decade later than similar people who didn't.
It's the most-quoted number in the advice industry, and you'll find it on a thousand adviser websites. Here's what you won't find next to it: who the advised people were being compared with.
Not with people investing for themselves. With people who didn't take advice — and who were far less likely to be invested at all.
The £47,000 doesn't measure what the adviser did. It mostly measures what the stock market did, for people who finally got put into it.
Where does the £47,000 come from?
The study is genuine and worth taking seriously. It tracked thousands of people through the government's Wealth and Assets Survey and found the advised group ended up with about £31,000 more pension wealth and £16,000 more in other financial assets by 2014/16.
And the single biggest reason is no mystery: advised people were far more likely to hold equities. Their money spent the decade in the market. The non-advised group's money, on the whole, spent the decade in cash — through one of the strongest recovery decades the market has ever produced.
That's a real benefit. If an adviser is what it takes to get someone out of cash and into the market, the advice genuinely made them £47,000. For someone who would otherwise never invest, that's the strongest honest case for advice there is.
So what's wrong with the claim?
Nothing — until it's used to answer a different question. The study compares advice with doing nothing. The question you're actually asking is whether advice beats doing it yourself — and on that, the study is silent.
Because the uplift comes overwhelmingly from being invested, a DIY investor in a plain index fund captures the same engine: the market. The difference between you and the advised investor isn't the return. It's who keeps the fee.
Run the like-for-like: £100,000 invested for the same ten years at the market's long-run average, paying an adviser's typical 1.5% a year, ends about £36,000 behind the same money in a low-cost tracker at DIY costs. Over thirty years the gap grows to £636,000. The fee quietly consumes an uplift the size of the famous one — and then keeps going.
The industry's best evidence, read carefully, says: being in the market is worth a fortune, and you don't need to be advised to be in it.
So are advisers worth it, or not?
Honestly: it depends on which problem you're paying them to solve.
If the problem is that you'd otherwise stay frozen in cash forever — the study says advice pays for itself. Though so would a stocks and shares ISA, one index fund, and a direct debit, at about a fiftieth of the cost.
If the problem is genuinely complex — a defined benefit pension, inheritance tax, a business sale — decent advice can earn its fee, and I've said so before.
But if the problem is “I have a pension and an ISA and I want them to grow” — the £47,000 claim doesn't say an adviser beats doing it yourself. No study says that. The uplift belongs to the market, and the market doesn't check who's asking.
This is what I write about every week — managing your own money in plain English, without paying someone 1–2% a year to do it worse. The letter is free.
I am not a financial adviser. Nothing here is personal financial advice. This is my own experience and opinion, shared for information and education. The figures above are illustrations at assumed growth rates, not forecasts. Investing involves risk and you can lose money. Please do your own research before acting.