You don’t need to be rich
A common misconception about financial advice is that it’s only for the wealthy, say many in the industry.
April Leeson, advisor at independent financial advisor (IFA) firm The Private Office, says: “Typically, people who come to us for help are at a crossroads in their life, having experienced a change in their circumstances such as a change in their career, retirement, the death of a loved one, an inheritance, redundancy or receiving a lump sum from the sale of a property, or simply want to ensure they have the financial security to provide for themselves and their family’s future.”
That said, it can be an expensive business, and the costs involved make it a no-go for some. Plus, advisors may turn away clients who don’t have much capital to invest.
Consumer group Which? says financial advice is available for portfolios worth several thousand pounds, but finding advisers willing to work with them “may be difficult”. It cites research which shows the number of IFAs willing to work with clients with less than £50,000 to invest has halved from 53% in 2019 to 25% in 2023.
Understanding your options
People who work in this field call themselves by a variety of names, including financial advisors, financial planners, and wealth managers.
Financial planners often say they see the bigger picture and take a more holistic approach than other advisors.
The title an advisor chooses may reflect their area of expertise, such as investment advisor, pension advisor or mortgage advisor.
“Whatever name they are called, what all financial advisers in the UK have in common is that they are regulated by the Financial Conduct Authority,” the government-backed Financial Advisers Council said. Money Helper The FCA’s website states: Financial Services Registration.
If an advisor deals with investment, pensions and retirement products they will be classed as either ‘independent’ or ‘restricted’. IFAs can recommend products from companies across the market. Restricted may be limited in the types of products they offer (maybe they only specialise in pensions) or they may be limited in the number of providers you can choose from (or both).
So if you talk to your advisor and you’re not sure what type it is, ask. If it’s limited, ask how many providers you have access to.
There are minimum qualifications that all financial advisors should have. At a minimum, Level 4 Diploma in Financial Advice It has been approved by the FCA. Many companies have done better than that. For example, Certified Financial Planner and Certified Financial Planner Qualifications.
Take a listen
Personal recommendations from family and friends are one of the best ways to find a financial advisor, but you should also do your own research, such as checking Trustpilot or Google reviews, to stay up to date on what people think of the company and any changes, such as business acquisitions or key people leaving the company.
Some employers, workplace pension schemes and trade unions work with particular advisers so it may be a good idea to speak to one of them and, if possible, speak to colleagues who have used them.
Search online
There are various websites you can try. Open-minded We work with over 27,000 qualified financial professionals and will introduce you to an advisor after you answer a few questions, or you can use our free directory to find an advisor.
Guarantor The site has about 12,000 advisors on it, and customers share verified reviews of them. You can search for recommended advisors’ names or find one in your area.
Wayfinder It can help you find a certified financial planner in your area.
Meanwhile, the Personal Finance Association There is a site You can find many different types of advisors in your area, including certified financial planners.
Compare costs
Advisors offer a variety of options when it comes to paying for their services.
The first consultation is often free, but fees vary after that, so make sure you know exactly what you’re signing up for.
People who recommend investments etc. cannot receive commission from the products they sell.
Advisers charge an initial fee, followed by an annual or monthly recurring fee, which can be a percentage of the investment or a flat fee. Other fee options include hourly fees, which MoneyHelper says can range from £75 to £350, and flat fees for certain tasks such as pension transfers.
Which one? Suggest He got quotes from three financial advisers, and added: “Don’t take the fees your adviser quotes you – if you think you can pay less, discuss it with your adviser.”
VouchedFor gives some examples of expected costs: Someone looking for support to invest £50,000 with ongoing advice could cost a total of £3,239 over five years, of which £1,244 is upfront. For creating a financial plan with £100,000 invested and ongoing services, the equivalent figures are £7,880 and £2,849 respectively. For combining three pension accounts worth £500,000 with ongoing advice, the figures are £27,785 and £8,705.
It has been said that advising on pensions and retirement planning can take up to nine hours, but if it’s a simple matter it shouldn’t take that long.
If you don’t feel you need face-to-face advice, an online or phone-based service will probably be cheaper. For face-to-face advice, fees will probably be higher in London and the South East than in other parts of the country.
Get help with payments
If you don’t think you can afford the full cost of receiving advice, help may be available.
England Pension Advice Allowance Many people with defined contribution pension schemes are able to withdraw up to £500 tax-free from their savings to pay for retirement advice. They can do this up to three times in their lifetime (but not more than once in any tax year). However, not all pension providers offer this allowance so you should check whether your pension provider allows it.
Some companies offer financial advice as part of their employee benefits packages, sometimes at a discount.
The government is free PensionWise If you’re over 50 and have a defined contribution pension (personal or workplace) this service may be useful to you. The service offers ‘guidance’ rather than regulated financial advice, face-to-face, over the phone and online. Appointments are typically around 60 minutes and we will explain your options for withdrawing money from your savings, tax implications etc, but we will not recommend any financial products or providers or tell you what to do with your cash. After the chat you’ll receive a document outlining your options and next steps.
If you’re under 50 or only have a defined benefit pension, you may not be able to get an appointment with Pension Wise, but you can still get help.
To find out more and book an appointment, please visit the Pension Wise webpage. In-person appointment slots are limited.
Organisations such as Citizens Advice and some charities also offer financial advice.
Environmentally friendly
Many financial companies and products claim to be ethical, but when it comes to investing and more, there is little agreement on what constitutes a “green” or “sustainable” fund. If you want to make a positive change with your money, you need to talk to your advisor about what that means to you.
There are plenty of ethical advisors out there, and sites like Unbiased allow you to hire advisors who specialise in green or ethical finance.
Ethical finance website “Good With Money” Announcing the “Top 9” The three names selected for 2024 are: Jeannie Boyle of London-based EQ Investors, East Sussex-based Path Financial, Wigan-based BlueSphere, Surrey-based Switchfoot Wealth, Manchester-based Castlefield, Tanya Pein of London-based In2 Planning, Edinburgh-based Ethical Futures, Cleona Lira of London-based Conscious Money and Lancashire-based Amber River True Bearing.
Do it yourself?
There are many free or low-cost resources you can use to create an investment portfolio, and investment firms such as Hargreaves Lansdown have websites with articles and information about their preferred companies and funds – however, this is not the same as customized advice.
“It’s a bit like having a fitness goal: with enough knowledge and discipline you can achieve it yourself, but getting professional guidance and helping you create a plan based on your specific needs will give you better results that will stand the test of time,” says Leeson of Private Office.
