Perception v reality: the importance of understanding the role of a financial adviser

I’ve recently been struck by some conversations I’ve had with regards to financial planning, and what an adviser actually does.

It’s clear that there is a substantial perception gap when it comes to what people think I do, compared to the reality of the professional financial adviser role.

This also extends to the assumptions that new and prospective clients have about my role as an adviser when I am talking to them for the first time.

Such assumptions can include:

• I simply recommend specific products for certain circumstances
• I just want to help you consolidate all your pensions into a single arrangement
• My role is to invest your money for you
• I will look to sell you life insurance and income protection.

While your financial planning is likely to involve some of those activities to a certain extent, it’s fair to say that, in reality, helping you plan your financial future is much more wide-ranging and goes far beyond that rather transactional list.

To give you an idea of the reality of the role of a financial adviser, here are five of the key functions I will fulfil.

1. Help you build and develop your financial plan

During our initial discussions, my aim will be to help you understand your financial priorities. I will then work with you to put a comprehensive plan together, in order to fulfil your objectives and get you on track to a long-term future of wealth and financial security.

Once your plan is in place, I will then help you review it regularly to ensure you are still on track to meet your goals, and make any adjustments we feel are necessary.

This review process will be carried out at least annually, as well as at times when your personal circumstances may change, such as starting a new job or the arrival of children.

2. Provide you with the peace of mind that comes from knowing you will be OK

Some time ago I wrote an article about the one financial question you won’t ask, but that you secretly want to know the answer to.

That question is, “Are we going to be ok?”

It’s a perfectly understandable question to want to ask, especially as you start looking forward to retirement.

After all, the familiar security of a monthly salary will be gone, and you’ll be living the rest of your life on the wealth that you have accumulated during your working life, plus whatever State Pension you are entitled to.

My role is to provide an emphatic “yes” to the question, and to help you plan for a future that ensures such an affirmative answer.

I’ll also help you plan your legacy and ensure your wealth passes to the people you want, as tax-efficiently as possible. After all, once you have the peace of mind of knowing that you are going to be OK, it then becomes equally important to ensure that your family will also be OK once you are no longer there to provide for them.

Find out more:

The psychology of spending money in retirement

What will you spend your money on in retirement?

3. Being someone that you can confide in about financial issues

The perception may be that I’ll simply want to sell you financial products. But, while I am providing financial advice and helping you plan your financial future, I see another key part of my role as being someone you can talk to about financial issues.

Having someone acting as an independent sounding board can be invaluable. I can give you some insight as to how a certain plan or idea you may have could affect you financially, and how you could adapt your plans to be able to follow through on them where appropriate.

It can also be useful to have someone who can give you rational advice if you are potentially making a decision based on emotions rather than logic and reality.

4. Helping you manage your reaction to financial news

Investing your money is long-term endeavour, and I believe it’s crucial for you to understand that occasional market turbulence is to be expected. Indeed, it’s a reality of investment markets.

Because of this, it’s important that you are able to tune out the constant drum-beat of noise emanating from the financial media, who are happy to talk in cataclysmic terms about the effect of every economic and financial upheaval.

At such times, the perception may be that I’ll sit in front of a computer screen, making investment deals on your behalf.

In reality, the best advice I will give you is to “do nothing”, because it is generally best to ignore what is happening in the short term because it will have little effect on your long-term prosperity.

Find out more:

Why your personal benchmarks are more important than external ones

Volatility is not something to fear – investment guru, Warren Buffett, explains why

Don’t believe the hype: Why it’s easy to get distracted from your long-term financial plan

5. Responding to new legislation

Legislation relating to financial planning is often subject to change.

Indeed, the most recent Budget in October 2024 saw a big change announced meaning that pension funds may be liable for Inheritance Tax from April 2027 – one of most impactful changes for several years.

Because of this, I see a key part of my role as your financial adviser being to help you adapt your plans to mitigate any changes that could adversely affect you and maintain tax efficiency at every opportunity.

Get in touch

As well as these five specific ways I can help you with your financial planning, there are countless others where my role as your adviser will involve helping you.

You can see some of these in the table below.

Source: Humans Under Management (used with permission)

If you would like to talk about any of these issues, please get in touch.

You can call me on 07769 156 250.

Please note

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, Lasting Powers of Attorney, or will writing.

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.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.