In today’s ever-changing environment, it is invaluable to stay informed and plan for the future.
Making financial decisions can sometime be a daunting experience, especially when you are looking at planning some big life events, such as a house move, starting a family, planning for retirement, and eventually, passing your wealth down to loved ones.
When you engage with a financial adviser, seeing the value can sometimes be purely focused on investment returns alone. People do not often talk about the other areas of value that engaging with a financial adviser can bring.
A financial adviser’s overall goal is to help clients make better financial decisions. A financial adviser can do this by helping clients overcome any anxiety or stress that can often accompany decisions surrounding their finances.
How do financial advisers provide value?
Making sure your investments are structured correctly can help with mitigating taxation on gains, withdrawals and passing down your wealth to your beneficiaries.
When looking at your investments, there are three areas that will be reviewed:
These are the foundations for the value that a financial adviser can provide.
Once the structure is right, we then look at ways to enhance your solution. These are the extra benefits that you can receive by working with a financial adviser, compared to setting up an investment yourself.
You should expect your financial adviser to work with you on a continuous basis to ensure:
Lastly, working with a financial adviser can help you feel reassured at times where our advice is to do nothing. This has become more relevant during 2020, when we have seen the markets become extremely volatile whilst the globe has been dealing with a pandemic. It is perfectly natural to want to sell your investment when markets start to decline, however, there is no way of knowing if your investment will continue to fall or whether it will recover. When investments recover, this can happen very rapidly. If your goals have not changed, neither should your plan. When working with a financial adviser, the overall financial plan is designed to be successful over the long-term, this includes the bad periods of time. Reacting to a fall in the value of your investment can be disastrous because these falls are impossible to predict. By selling your investment, you are realising the loss. Whereas, by remaining invested, you have the ability to recover. Various studies have shown that reacting to a fall in your investment is one of the biggest destroyers of returns for investors. Unfortunately, our psychology means that this is a natural decision to make, so having a financial adviser can help control these natural instincts.
Your financial adviser should become your trusted adviser, who will become integral to your financial decisions.
The value of investments, and the income they produce, can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
The Financial Conduct Authority do not regulate trusts.