Seeing a financial adviser will not only improve your finances and help you plan for the future, it will also make you happier, according to a new report.

The Back to Basics report released this month by the Association of Financial Advisers (AFA) says people using financial advisers have greater self-rated financial knowledge and understanding.

It also says a number of “extra financial” intangible benefits also arise from having a financial adviser – including being happier with the manageability, diversification and return of their investments and greater peace of mind.

The report says the preferred method of payment for advice was on a fee determined by the service provided, although this was still only chosen by 20% of respondents.

According to the survey, the option of “fee paid by commission” was preferred by 13%, while 10% preferred “commission per transaction”. Some 9% preferred a “fee based on a percentage of assets under management”.

However, 31% of people who didn’t seek advice said the fee structures offered are not acceptable, while 30% said they didn’t want to pay for advice.

“The research findings very clearly demonstrate that consumers who have an advice relationship are better planned and happier with their investments than those who don’t,” AFA CEO Richard Klipin said.

“Consumers with advisers rank them the third most trusted professional, after medical specialists and dentists.

“They look on their adviser as a coach helping them along the path to financial freedom and therefore have greater peace of mind.”