Reasons to use a Financial Adviser

Many individuals have their own justification for whether they think they need a financial adviser, others might not understand what the role of a financial adviser is and some believe they can get the same returns that a financial adviser can give them on their own.

We understand that not everyone needs or wants a financial adviser but here is our answer to what might be your thoughts.

“I can manage my own investments myself & I don’t need advice”

This may be true. You may well have the insight and the time to manage your own financial plans, or it may just be a simple, low-risk decision that is required to be made, but this is often not most peoples’ experience.

Most of our clients don’t want to or don’t feel confident enough to risk their life savings on their own.

  • They want to know that their money is invested sensibly and in the right product and that they understand all the repercussions of making financial decisions.
  • They want to be able to receive information and reports that tell them something useful.
  • They don’t want to deal with arduous phone calls and paperwork with insurance companies.
  • They want help simplifying this element of their life.
  • Financial decisions can often be complex to the inexperienced and they also do not exist in a vacuum. They are often interlinked with other life decisions, so the full picture may need to be assessed properly and professionally.

Investment journeys can have emotional effects which can lead to bad decisions such as greed, fear, anxiety, stress, panic, elation, and over-confidence. Sometimes you need to discuss this element with an impartial adviser.

“My finances do not merit the attention”

Many financial advisers set minimum limits on what they will deal with. Our general policy is that nothing is too small because the person is more important to us than the amount of money. We will always try to accommodate clients’ wishes, wherever possible. If we cannot help for any reason, we will always try to guide you in the right direction.

“It costs too much” or “I don’t know what I am paying for”

Financial adviser fees vary but we charge, in almost all cases, a 1% initial fee on any amount of money brought into the firm and this initial fee is capped at £2,500.

This fee covers the initial work, advice and the increased ongoing cost of regulatory charges we incur by increasing the number of funds under management that we manage.

We also charge 0.5% per year on the fund value that we manage, which pays for investing our client’s monies sensibly, regular reports and administration.

Our 1% fee is a one-off charge. Once monies are received, they may be invested for 30 years+ and can be viewed as very good value.

Our ongoing 0.5% fee not only covers the advice and administration, but our clients may benefit from cheaper provider fees and fund fees that you may otherwise pay individually. Many direct investments with providers have a 5% initial fee which is not applicable with us. Providers often describe their service as having ‘no commission’, but instead charge other fees that are not explicit or you may be paying 0.70% per year for a fund, which should actually only cost 0.15% per year.

There is little point in saving 0.5% per year if your actual returns are 1% per year less. I.e. the cost of advice on £100,000 is £500 per year – you should therefore be sure that your returns would be £500+ per year more or you would have to be doing your own analysis and administration at your own cost and time.

“I do not trust financial advisers”

You should always speak to a few financial advisers before you decide who may be trustworthy.

Check the Financial Conduct Authorities (FCAs) Register which will tell you whether the firm and adviser is regulated by them.

Ask questions of the adviser/firm such as:
– What is your initial fee? This will usually range from 1% to 3% or may be a fixed fee or hourly rate.
– What are the ongoing fees? This will usually range from 0.5% to 1% or may be a fixed fee or hourly rate.
– What qualifications do you have? The minimum requirement is Diploma (Dip), higher qualifications are Chartered or Fellows who will have done significant and useful additional studies.
What is your investment process and/or philosophy?
– What do your client reports look like and what additional information do you give over, above a provider’s annual statement.
– Are there additional charges for certain aspects of administration, i.e. arranging tax-free cash, income payments, fund changes, and changes to investment structures.
– Are all investments covered by the Financial Services Compensation Fund (FSCS) – i.e. if I invest more than £85,000 how does it remain within the FSCS remit.

“I trust internet websites to guide me to find the best advice”

There is often a lack of transparency when accepting a referral purely from the internet even if the website appears to offer a legitimate service – usually, financial advice firms or advisers pay for these referrals and the ‘highest bidder’ rather than the ‘best qualified’ wins your enquiry – even if there are written referrals available for you to see these are often ‘engineered’ by firms asking their best clients to oblige, whilst ignoring the least favoured clients. Word of mouth and speaking to firms yourself is the way I would place the level of trust required – I would certainly be wary if I knew someone had paid for a client’s interest.

“Financial advisers are too pushy”

We don’t believe in repeating what we say unless we are asked to do so – once should be sufficient. Once we have discussed your options with you, to the best of our ability, we believe you should then make your own decisions, in your own time and we will wait for you to instruct us or to ask us further questions or we will simply assume that you have made alternative arrangements. 

“I do not want to be judged on my financial mistakes”

Most people have an opinion on most things and finances are no different. The main problem is that many people in the financial industry are often guilty of making things more complicated than they need to be, often this is a sign that maybe they themselves don’t understand well enough how to make things more simple. The language used is often confusing and intimidating and many people make silly mistakes because they were advised badly – often by people who have no business advising at all because they are not regulated or knowledgeable enough themselves.
Our job is simply to advise you of what your options are, by showing you the benefits and disadvantages of each option, in order that you can voice your preferences and make your choices clear.

“I do not need financial advice yet – I will get some in a few years”

People often convince themselves that they have plenty of time to make financial plans for the future and that it doesn’t need to be done just yet.
The benefits of compound returns over time means that putting the time and effort into your financial future today, rather than waiting is generally best.
Sorting out your pension may not be top of your list of things to do, but finishing work and retiring is something that should be important to you and thinking of this in this context may spur you on. Making sure you have a plan in place could potentially make that happen earlier or put more in the pot.

Whilst everyone has their own opinion of financial advisers, we believe that we offer a valuable and cost-effective service to our clients with a worthwhile benefit to help them with their financial journey.

To speak to a financial adviser about your pension or investments click here.


Picture of Woody Snapper

Woody Snapper

Woody works with individuals and business' looking for corporate finance, high net worth mortgages, complex loans, bridging loans and development finance.

To contact Woody.

Tel: 07922 413586