1. I don’t need advice, yet
You might think you’re too young to speak with a financial planner. But, you really shouldn’t put it off. No matter the current value of your savings, getting some advice and help as early as possible can make a big difference to future financial security, all thanks to the impact of compound growth. For example, if you are saving just £100 per month towards retirement with an assumed average growth rate of 5% p.a. then;
- 10 years saving gives a final balance of £15,593 which is a 30% total growth
- 20 years and the final balance is £41,275 giving an impressive 72% growth
- Saving over 40 years the final balance is £153,238 which is an impressive 219% growth
If you increase your monthly contribution to £200, after 40 years that £96,000 with the assumed 5% compound growth would be worth £306,476” With cashflow planning we can easily demonstrate an assumed wealth over time with significantly more factors considered.
Furthermore, you might have more savings to review than you realise. Thanks to Auto-Enrolment the latest figures from The Pensions Regulator show that over 10 million people now have a Workplace Pension – that’s more than 84% of employees.
2. I can just do it myself
Yes, it’s become much easier to manage your investments online. Having a self-directed portfolio might be appropriate for some investors, especially if they have previous experience. But, it’s not for everyone.
There has been a study on the value of financial advice conducted by the International Longevity Centre UK. They found that an affluent investor, on average, accumulated £43,245 more after taking financial advice compared to a non-advised investor. The figures speak for themselves!
There’s a very good reason financial advisers and planners must take quite so many exams, continuing professional development and are very closely regulated by the Financial Conduct Authority.
3. It’s too expensive
Good planners will be transparent with the cost of varying levels of service. No hidden extras. What you need to consider is the value you’re getting from advice, not the price. We’ve already outlined the financial benefits of advice vs self-investing, but there are other benefits too;
- A dedicated professional
- Clarity in your future goals
- Peace of mind
- The ability to quickly react to opportunities or threats
4. I’ve got a friend who knows about investing
This is a slightly dangerous situation. It might be a lifelong friend or an acquaintance down the golf club. If they’re an authorised financial adviser or planner with a good reputation, brilliant! But, if they’re not, and no matter how financially successful they may personally be, it doesn’t mean they have the knowledge and experience to help you in your circumstances.
Everyone’s personal circumstances are unique and there is no one-size-fits-all financial plan. Your tolerance to investment risk might be wildly different, for example. You may not have used your tax-efficient allowances or minimised any potential Inheritance Tax implications. Let’s remember also, that your financial plan is based around your goals and aspirations. We need to help define them in the first instance and plan accordingly.
5. I don’t want to air my financial dirty laundry
As a nation we can be a little awkward talking about money. It can even be difficult to open up to a financial professional, especially if you’ve made some mistakes with money in the past. But, it’s in these circumstances that sound financial planning can be more valuable to you than ever. With financial training, guidance and support we are here to help you get back on track.
We’re all human, we all make mistakes. If you break your arm in a potentially embarrassing situation, you’re going to go straight to the hospital anyway! It should be the same if you make a mistake with your money, but unfortunately, that’s not always the case. It’s widely believed people are too ashamed to own up to some circumstances, especially if they’ve fallen victim to a scam.
6. Financial planners can’t be trusted
There is an issue with trust in our profession. There’s no doubt the financial crash in 2008 dented the reputation of bankers and financial professionals. But, way before that, in the 1980s, we had a pension mis-selling scandal. Then, in the 90s, it was endowment mis-selling. Most recently, the PPI scandal.
Although research from Edelman found that trust in financial services is at its highest since they began recording it, this still only accounts for 57% of the general population. That’s significantly lower than other sectors, and actually the least-trusted they measure.
There certainly used to be a whiff of ‘dodgy salesman’ among some advisers in the past. But, financial planning, which has arguably developed from more product-led financial advice, has come a long way. Believe me.
We all must do a little self-promotion sometimes, but I’m very proud to have been named as one of the UK’s top-rated financial advisers. The list, based on reviews by genuine clients and compiled by VouchedFor, was published in The Times on Saturday 23rd February 2019. This reiterates my core belief; that I believe completely and utterly in the benefits that true bespoke financial planning brings to everyone.
The value of an investment can go down as well as up and you may not get back the full amount invested. Past performance is not a guide to future performance.
Foster Denovo Ltd are authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate taxation and trust advice