If you're uncertain about managing your money, it may be beneficial to consult a financial adviser.
Many individuals manage their finances independently, often without the assistance of a financial advisor. However, relying on your own expertise might not always be the most advantageous approach. Certain life circumstances can warrant consulting a financial advisor to ensure financial stability and achieve long-term goals.
In several cases, seeking a financial advisor's counsel can lead to significant financial improvements. For instance, research conducted by the International Longevity Centre UK in 2017 indicated that individuals who worked with financial planners were Nearly £48,000 better-off after ten years.
Life events such as retirement planning, inheritance tax planning, career changes, marriage, illness, property acquisitions, or significant wealth increases may necessitate expert advice. Retirement planning, for example, involves optimizing pension plans, managing tax liabilities, and securing a financially stable future.
Inheritance or inheritance tax planning can be complex, but a financial advisor can help navigate these issues efficiently. Career changes may necessitate managing increased earnings, benefits, and tax implications, a task best addressed with the guidance of an advisor.
Starting a family requires adjusting financial plans to cover future education costs and reviewing estate planning documents. In the event of illness or long-term care, planning for potential financial impacts can be crucial, with a financial advisor providing options like long-term care insurance.
When buying a home or a second property, financial advisors can offer guidance on mortgages, tax implications, and investment strategies. Managing executive compensation, such as stock options and bonuses, requires expertise to minimize taxes and optimize investments. Finally, a financial advisor can help with post-sale financial planning and wealth management following a business sale or acquisition.
A survey conducted by wealth management firm St James's Place shows that 84% of individuals who use a financial planner benefit mentally or emotionally from their services. If big money decisions are causing stress, it might be wise to seek expert help.
Cost is a factor when considering a financial advisor's services. Standard fees are around 1-1.5% of total investments. One-off needs, such as inheriting a large lump sum or winning a substantial Premium Bonds prize, can be addressed with fixed fees, albeit at a higher cost. Some advisors charge an hourly rate, typically between £75 and £350, according to the government's MoneyHelper.
When selecting a financial advisor, it's essential to have a good rapport and feel that they can be trusted. The minimum qualification to look for is a level 4 diploma, backed by professional membership at bodies like the Personal Finance Society or the Chartered Institute for Securities & Investment. Finding a financial advisor can be done via platforms like Unbiased or Vouchedfor, or by asking friends and family for recommendations. It's always a good idea to meet with a few advisors before deciding on the right one.
Recent statistics suggest that 29% of over 55s who have already retired are not living the retirement they planned for, underscoring the importance of financial planning. Over one in ten retirees wishes they had planned better for their financial needs in retirement. England's managing director, Canada Life, emphasizes the significance of engaging the services of a qualified financial advisor early on to ensure a flexible, well-planned, and controlled retirement.
- Consulting a financial advisor can lead to substantial financial improvements, as shown by research indicating that individuals who worked with financial planners were Nearly £48,000 better-off after ten years.
- Life events such as retirement planning, inheritance tax planning, career changes, marriage, illness, property acquisitions, or significant wealth increases may necessitate expert advice, as navigating these issues can be complex.
- A financial advisor can provide options like long-term care insurance in the event of illness or long-term care, and offer guidance on mortgages, tax implications, and investment strategies when buying a home or a second property.
