Financial planning can help build the future you’re looking forward to. However, research suggests that many UK adults aren’t benefiting from financial advice as they shun seeking support. There are numerous ways that financial advice can add value to your plans. It’s not just your financial security to think about either, financial planning could help your children and grandchildren too.
When dealing with legal matters, we’ll typically seek out the expertise of a solicitor rather than going it alone. But when it comes to financial matters, many people are likely to take a DIY approach.
According to research, almost half (48%) of all British adults have never taken financial advice. For 34% of these, it’s because they believe they can manage their own finances. This figure rises to 57% for the over-65s despite retirement being a crucial milestone where financial advice can add value.
Here are six ways financial advice could help you:
1. Seeing your circumstances from another perspective
When planning your own finances, you’ll typically only be looking at plans from one perspective. And it can be difficult to be objective; after all, these are your decisions and goals. A financial adviser offers you another pair of eyes.
You may think you’re making all the right decisions for you, but when seeking advice discover there are opportunities and risks that you may have missed. It could mean your investments delivering higher returns over the long term or savings being held in a way that’s more tax efficient.
2. Confidence in your plans
It’s important that you have confidence in your financial plans. You should feel certain about the decisions you’re making and the impact they’ll have on the future. If finances are an area you feel unsure about, financial advice can add value here. As financial advisers, our goal is to present financial solutions that are tailored to you and demonstrate why this is the advice we’ve given. It’s a process that can provide you with confidence in plans, whether you’re planning for retirement or starting a nest egg for the next generation.
3. Planning for retirement
Retirement is a point in life where you have to make many financial decisions, including some that could affect your financial security for the rest of your life. The research shows that for many workers there is a lack of retirement planning. Despite this, many have clear ambitions they want to achieve in retirement. 34% want to maintain their standard of living, but figures suggest there could be a gap between expectations and reality.
Working with a financial planner during your working life can help put you on the right track for the retirement you want. Understanding the actions you should be taking now to secure retirement can make it far easier to reach that goal.
4. Getting the most out of your money
Everyone wants to get the most out of their savings and there are numerous ways financial advisers can help you do this. From selecting tax-efficient savings to choosing investments that match your risk profile, seeking professional help with your finances can help them grow.
A previous report found that individuals that took financial advice could, on average, be £40,000 better off than those that don’t. Those that worked with a financial adviser were likely to have more in liquid financial assets and in their pensions, improving both short and long-term financial security. Financial advice can help you understand your options and get the most out of your wealth.
5. Plan for the future
How would you cope financially if your income were to stop? What income can you afford to sustainably withdraw from your pension each year? What inheritance can you expect to leave behind for loved ones?
Planning for the future can result in a lot of ‘what ifs’ and uncertainty. However, it is possible to consider what might happen and understand how your wealth will change because of this. Financial planners can use a range of tools to model how your income would be affected by events and decisions in the future, both those in your control and those outside of it. With this in mind, you’re in a better position to plan for these and keep your aspirations on track.
6. Advice that’s tailored to you
With so many resources on the Internet and other sources, you may think you don’t need advice at all. But it’s crucial to remember there is no one-size-fits-all solution when it comes to finances. Seeking advice can help you create a financial plan that’s tailored to your current circumstances and what you want to achieve. If you’re looking to invest and get the biggest returns possible, you may find resources that suggest high-risk investments. But for many investors, these would not be suitable due to risk profile, for example.
Choosing to receive financial advice is an opportunity to assess your personal situation and receive the advice you know you can rely on.