This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult an independent financial adviser.
What is a financial adviser worth to you? At the very least, he/she can help you answer initial questions such as: “Am I saving enough to retire comfortably?” and “How do I plan my estate for inheritance tax?” Yet these questions often result in more questions from your financial adviser – intended to help you think about things from other angles. These might include:
- What sort of lifestyle do you envisage for retirement?
- Is there anything on your bucket list which you want to achieve before (or in) retirement?
- If you could retire earlier, would that be of interest to you?
- Which other goals and priorities do you have?
This can have an unexpected result for many people – receiving advice and help which goes beyond the initial reason(s) they approached the adviser for. In this article, we explain the real value in professional financial advice – for your benefit, and perhaps for someone you know.
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Professional advice costs money, yet it is a case of paying money to help put more back into your pocket. The initial consultation is free, so if the value is not apparent after the first meeting then you can walk away having only spent your time.
One study shows that investors who seek financial advice generate, on average, 27% higher returns in the first 12 months compared to non-advised investors. This is partly because your adviser can often point you towards cheaper investments which you may have missed – along with better fundamentals and prospects for higher performance.
A similar picture is borne out on the pensions front. One Unbiased report suggests that those who took advice on their pension(s) at the beginning of their careers saved £34,300 more than those who took no advice. This excludes the compound interest and tax relief too!
A financial adviser can be an enormous help when building your assets. After all, many taxes exist to extract value from these (for the government) – so having an expert nearby to help you mitigate these can add up to a significant sum.
One clear example of this is inheritance tax (IHT). In 2021-22, IHT stands at 40% on the value of your estate over £325,000. Without financial advice, it would be easy for someone to overpay on IHT due to poor planning and lack of knowledge about the IHT landscape. A financial adviser can, however, give you the most up-to-date information to make informed decisions.
Yet a financial adviser can also help people with other financial goals, too. A business owner, for instance, may need help finding the right balance between her salary and dividends from a tax perspective. A Higher Rate taxpayer, moreover, might benefit from financial advice which could help reduce his income tax bill – perhaps by optimising pension contributions.
Financial advice goes beyond mere financial performance and asset growth, however. It also brings great benefits to your emotions, mental health and overall well-being (which can be just as valuable to clients). A case in points is helping you understand your goals.
For many people, their lack of clear financial goals can be disconcerting. “Where should I be going?” “Am I heading in the right direction, and if so, am I progressing as well as I could be?” Financial advice can bring clarity to these questions, bringing focus and peace of mind. They can also help you prioritise your goals based on your values and financial astuteness.
Of course, it may be that you prefer to take a “DIY approach” to your wealth and finances. Yet this is usually very time consuming, and it is difficult to keep up with developments (e.g. new tax laws) when you also have your other life commitments. A financial adviser can help take away this legwork – freeing up your time to focus on what you enjoy.
A final concrete benefit to financial advice is that it gives you more confidence in your financial decision-making. One of the most draining questions we all ask ourselves is: “What if?” With a financial adviser, you can use them as a sounding board and get an educated second opinion. Over the years ahead, this helps you to look back with a sense that you made the best choices you could – with the best information available.
A financial adviser is a helpful guide to have not just at specific moments in your life when you have an urgent problem to solve – such as sorting through a sudden inheritance. He/she can also be a valuable source of help throughout your life, helping you stay on track towards your financial goals over the medium and long term.
Interested in discussing your financial plan with an experienced financial adviser? Get in touch today to discuss your financial plan with a member of our team here at Cedar House via a free, no-commitment consultation:
020 8366 4400 or email@example.com