mechanic repairing a car

Why you should trust a professional when your financial future is at stake

Although I’m happy to try my hand at the occasional straightforward DIY job around the house, when it comes to anything costly or complicated, I’m a firm believer in getting an expert in to do it.

Likewise, when my car was recently due for its annual service, I suppose I could have had a go at doing the job myself. However, it would have taken at least a weekend, when my time could have been better spent doing something I’m actually good at or enjoy.

The service wasn’t cheap, but I had the comfort of knowing professionals had done it and, if there were any problems, I could take it back in and get them fixed.

If you’re anything like me, you’d rather get something right first time than have a go yourself, get it wrong, and end up with an unnecessary bill to put it right.

Read on to find out why outsourcing complicated tasks makes sense when it comes to planning your financial future just as much as it does for fitting a new bathroom or getting your car repaired.

A DIY approach to your financial planning can be a minefield

When it comes to something remotely complicated there’s usually a strong argument to getting an expert to do it for you.

If you do it yourself, you’re trusting a lot to luck. You’re hoping that the job is straightforward and goes according to plan.

Very often, doing it yourself to save money can be a false economy.

This very much applies when it comes to your financial planning too. Key issues such as investment strategy, taxation, and retirement income can be fraught with complexity and pitfalls that seem to have been designed to trap the unwary.

From putting your plan together initially, through to regular reviews to check you’re on track, to the actual process of drawing your retirement income, advice from a professional is – to my mind – essential.

Financial mistakes can be costly

In very blunt terms, when it comes to planning your financial future, a simple mistake could mean the difference between a comfortable retirement and one spent having to count every penny.

You only have to read the financial pages or cast an eye over consumer websites to find cautionary stories of people who got tangled up in a minefield of complexity rather than trusting their financial planning to an expert.

The sort of mistakes it’s so easy for you to make include:

  • Exceeding the Lifetime Allowance, which can mean a draconian tax charge of up to 55%.
  • Inheritance Tax planning errors that can easily result in an unwelcome tax bill for your beneficiaries.
  • Choosing the wrong investment strategy so you end up with a portfolio totally unsuited to your future needs.
  • Failure to ensure your loved ones are financially comfortable in the event of your death or inability to provide for them through ill health.

Most mistakes of this kind are irrevocable and will cost you and your family a lot of money.

Doing your own financial planning is more than simply stock picking

If you’re thinking of trying to manage your own financial future, here’s a list of some of the subjects you’ll need to acquire a high level of expertise in to be able to do the job effectively.

Investment analysis

You’ll need an understanding of how investments work including the different kinds of asset classes and the way markets react to different external events.

Behavioural psychology  

One of the keys to financial planning is your own behaviour. So, you’ll need to appreciate what your key drivers are when it comes to wealth accumulation and how to manage your reaction in the event of financial upheaval or a significant fall in the stock market.

Risk management

Effective financial planning can be derived from an appreciation of risk events, and how they can affect your long-term goals.

Financial legislation

Finance doesn’t stand still. Laws affecting financial planning are constantly changing, so you’ll need to keep abreast of changes that could impact on your own financial circumstances.

This particularly applies in the field of taxation. The chancellor’s annual Budget statement is about far more than the cost of a pint of bitter or a litre of petrol!

Financial planning deserves professional attention

The other key attribute you need is time.

Time is very much a finite resource and a precious commodity. I’d respectfully suggest that the time it would take is more than you can reasonably spare, which is why I’d always recommend you use an experienced financial planner rather than try to do the work yourself.

In the same way a professional motor mechanic can stop you from breaking down on the hard shoulder in the pouring rain, a knowledgeable financial planner can help you face your financial future with confidence.

Get in touch

I can’t help you with DIY projects or getting your car repaired, but I can help with your financial planning.

You can call me on 07769 156 250.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Foster Denovo Limited is authorised and regulated by the Financial Conduct Authority.

The Financial Conduct Authority does not regulate school fees planning, taxation & Trust advice and Will writing.