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Do I need a financial adviser?

It’s a common question people ask themselves – do I need a financial adviser? Am I the wrong person to ask? Perhaps! I might be biased and of course, you would expect me to say “Yes, you do!” But maybe you don’t. What I’ll try to explain here is why you might need one and what you can expect.

Fees: Many people think financial advice is out of reach and far too expensive for ordinary people. This is not true. The first thing you can expect is a free initial consultation. This initial consultation is typically exploratory, where your financial adviser would do his best to get a comprehensive picture of your financial circumstances.

What does a financial adviser do?

A financial adviser provides tailored financial guidance and services, starting with an assessment of your current financial situation. They help you set clear financial goals, offering tailored recommendations and strategies to achieve them.

This includes advice on investments, IHT planning, estate planning, insurance, and wealth management. Advisers continuously monitor and adjust your financial plan as needed, ensuring it aligns with life changes and market conditions.

Overall, their expertise empowers clients to make informed decisions and work towards financial security and success.

What should I expect if I engage a finacial adviser?

Some advisers may offer you a free financial health check, where after gathering information about your circumstances, they will give you a breakdown of where they feel there may be shortcomings in your financial planning. It is only when they start doing chargeable work that fees would apply.

For example, in writing a report summarising your financial position or in setting up a plan for you. Most advisers would charge an hourly rate or a percentage of what you invested and this would all be discussed and agreed upon before they started any chargeable work.

Expect to be asked some difficult questions by an IFA

For example, if you had a family, your adviser would be sure to ask how your family would survive if you died. Or as a non-working Mum, whether you would you be able to get by financially if your husband died last night?

Or what would happen if you were unable to work due to an accident or illness? What about if you suffered a critical illness? How would you cope financially if you were out of work for say two years?

Your adviser would want to know what rate were you paying on your mortgage and whether you could get a better deal. They can answer questions such as ‘should I overpay my mortgage‘ What about other debts? Do you have any? What is the interest rate?

Should you be paying them off? What is left after you’ve paid all your bills at the end of the month? Is there a surplus? What are you doing with it? Perhaps there is a deficit. What can be done to change that?

Can a financial adviser make me wealthier?

Well, they don’t have a magic wand, nor can they predict the future. However, with a solid plan and professional recommendations a financial adviser could help to make you wealthier – over the long term. They will guide you toward the right investments, savings accounts, and pensions, based on your attitude to risk and overall objectives.

Do I need a financial adviser to help me reduce inheritance tax?

Engaging a financial adviser can be valuable in reducing or avoiding inheritance tax. They can assess your estate, recommend tax-efficient strategies, and ensure your wealth is distributed efficiently. However, it’s advisable to consult one to understand the options and tailor a plan that suits your specific circumstances and goals.

Do I need a financial adviser if I am planning for retirement?

That’s a fair question. Here are a few for you to consider.

How much money would you need to live on in retirement? Do you have a target? Are you on track? If not, what are you doing about it?

What about your savings? What return are you getting? Could you do better? Are you paying unnecessary tax on your savings? Are you expecting an inheritance? Have your parents done any estate planning? What about you? What taxes would have to be paid if you died? Have you made a Will?

Do I need a financial adviser to help me with my pensions?

Whether you need a financial adviser for your pensions depends on your financial knowledge, goals, and comfort level with managing investments. Advisers can provide expertise, optimise your portfolio, and navigate complex tax laws. Consider your circumstances and objectives to determine if professional guidance is beneficial.

Do I need a financial adviser to help me increase my net worth?

While not mandatory, a financial adviser can be instrumental in helping you increase your net worth. They assess your financial situation, provide investment advice, and develop strategies to optimize your assets and minimize liabilities. Depending on your goals and complexity, their guidance can prove invaluable in achieving financial growth.

Do I need a financial adviser to help me make sound investments?

Engaging a financial adviser can greatly assist in making sound investments. They offer expertise, assess risk tolerance, and tailor investment strategies to your goals. However, it’s not mandatory, and some individuals with financial knowledge may choose to manage their investments independently. It depends on your comfort level and financial literacy.

An adviser will help you create and stick to a financial plan

After all these difficult questions, your financial adviser should be able to put a financial plan in place to plug any gaps in your finances. Your adviser probably won’t tell you much that you don’t know already. But hearing it from someone else, someone who is objective and can see you with fresh eyes can be invaluable.

Typically, you would end up with a summary of recommendations. And your adviser would ask you to prioritise what needs to be done sooner rather than later. The relationship wouldn’t end there.

Your financial adviser should arrange to have a discussion with you every so often to help ensure that your plan evolves with you as your life progresses. Your priorities may change. Furthermore, a good adviser will help you to set financial goals and will help you achieve them.

Your circumstances may develop. And your financial plan must change, develop, and evolve around you.

Summary: Do I need a financial adviser?

Personally, I think financial advice is worth every penny and can change your life for the better. But then again, I would say that wouldn’t I? As I said at the start of this article, maybe I am the wrong person to ask!

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