Nothing in life of any real value is ever free, so I often wonder why it was the case that for years all the major banks and financial institutions promoted so called ‘free’ financial advice.
Anyone who has taken financial advice will understand that the services of a highly experienced and knowledgeable professional adviser cannot possibly be free.
Unfortunately, too many people get hung up on the potential cost of financial advice before they even take the first step and as a result end up either heading down the highly dangerous DIY route or simply do nothing at all.
Of course, the cost of advice is a factor, however far more important is the value that can be derived by engaging a professional adviser. This value can be quantified in many different ways, but to highlight just one example let’s consider the perception that many people have over ISA’s.
In the UK, billions of pounds are held in cash ISA’s, mainly due to the clear tax advantages of these accounts. As a result, many people truly believe that a cash ISA is the best thing for them. Whilst this may indeed be the case, with interest rates held at an all-time low now for almost ten years, the most important thing to consider when opening an ISA is not how tax efficient is it, but what are you trying to achieve with your money? If you are looking for a short term easily accessible account and not at all worried about the long-term returns or the effects of inflation on your money, then a cash ISA is probably going to be fine. On the other hand, if you are looking to maximise your returns over the medium to longer term, then no matter how tax efficient a cash ISA may be, based upon recent interest rates you are inevitably going to be disappointed by the results.
A recent survey by the International Longevity Centre – UK (ILC-UK), highlighted that people who take financial advice are on average £40,000 better off.
Advised investors tend to save more and are more likely to make investments in real assets such as equities, which helps their wealth grow over time.
The report also found that 9 in 10 people are satisfied with the advice received, with the clear majority deciding to go with their adviser’s recommendation.
Not enough people engage the services of a professional financial adviser when making important financial decisions. The report found that the two main considerations for people seeking advice are whether they trust an independent financial adviser to provide advice, and their own level of financial capability. Surprisingly cost of advice was well down the list of considerations.
Today there are very few barriers to people engaging the services of a financial professional as most advisers will offer a no cost, no obligation exploratory meeting and at a venue convenient to you, including your own home.
Call your local Area Adviser
John Varley
01522 43 73 50
jvarley@flyingcolourswealth.com
