Here we investigate 8 common myths about financial advice, and explain the truth behind each of them.
Financial advisers will only give advice relating to investments
Our financial advisers give all round advice relating to all of your financial and family matters. This includes tax advice, planning for retirement, protection policies, maximising your savings and estate planning.
Only wealthy people need a financial adviser
Financial advice is not only important once you have built up wealth and assets. It can be just as valuable to seek advice in order to maximise your savings, reduce your tax liabilities and plan ahead for retirement.
Only wealthy people can afford a financial adviser
It is a common misconception that financial advice is only affordable for those who are rich. Some advisers will charge a fixed fee, whilst others charge an hourly rate, or a percentage of the assets. The amount you will pay will depend on your own situation and the structure that you require.
Our advisers offer a free review of your finances, in order to assess what your requirements are.
Effective tax planning is dodgy
Whilst tax evasion is illegal, tax planning isn’t. Everyone has a personal tax allowance that they can utilise, and there are various tax free products that can be used, such as an Individual Savings Account (ISA).
A good financial adviser will show you how to maximise your allowances to reduce the amount of tax that you need to pay. For more information on this, you can read our Top Tax Tips here.
All financial advisers are the same
There are some similarities between advisers, but there are also a number of differences that are often overlooked. These include, but are not limited to:
- Their charging models – either hourly fees, fixed fees or a percentage of assets
- Their specialist area – some advisers specialise in retirement planning, others on reducing tax etc.
- The type of adviser that they are – restricted or independent, depending on how much of the market they cover
It is also important to give some consideration to the type of service you would like to receive. Do you prefer a formal approach, or a relaxed and friendly environment? Every one of us is different, so it is vital that you choose an adviser that suits your particular needs.
My finances are simple so I can do it myself
What can seem like the most simplest of structures can be far more complex than you first realise. There may be things that you have not yet considered, such as:
- Life insurance – particularly if you have young children, or own a property of some kind
- Income protection – ensuring your income is covered if you are unable to work
- Critical illness cover – provides you with a lump sum if you suffer an injury or are taken poorly with an illness or disease, such as cancer.
- Estate planning – having a valid will in place to protect your family and loved ones, and the use of trusts and Lasting Powers of Attorney
- Retirement planning – you may feel too young to think about retirement and pensions yet but early planning is essential.
To ensure that you have everything that you require, it is best to seek some advice from a professional, no matter how simple it might seem.
You need a lump sum to invest
Not all investments require a lump sum, as it is also possible to make monthly payments into a policy. This can also have added benefits, particularly as markets fluctuate over time. You can read more about how paying monthly can enhance your savings here.
Financial advisers are just salesmen who are out to make money
In 2012, commission was banned on investments and pensions, instead being replaced with an appropriate fee for the work being carried out – this could be an hourly fee, fixed fee or a percentage of the assets. This is something that your adviser will discuss with you in advance.
The advice that we give is always based on what is best for our client, and is why we offer a free financial review.
To discuss your individual needs and requirements, book your free financial review today with one of our highly experienced advisers. Simply complete the form below and we will be in touch!