The value of advice
Artwork by Chuck Elliott
The value of advice
It’s never been easier to access information about boosting and managing your own wealth, so you may question why you should pay someone else to do it for you.
Here, we reveal the many advantages of seeking professional advice rather than going it alone, and the true value an independent financial planner can add to your life.
Improve your financial position
There are many reasons why you might want to get better control over your finances; some of them are discussed elsewhere on this page.
But if your main aim is to grow and protect your wealth, there’s no substitute for enlisting the services of a professional independent financial planner or adviser.
A study by Vanguard suggests that a properly executed financial plan can increase the net returns on your investment portfolio by 3% or more per year.
An independent financial planner, who has unrestricted access to the whole market and the negotiating power to secure exclusive rates, is usually the best choice to help with this.
Enjoy long-term benefits, not quick wins
Getting some form of financial advice is better than none at all, but if you want lasting success, it’s something you should regularly revisit.
Research by the International Longevity Centre found that individuals who spoke to a financial adviser multiple times over a ten-year period had a 50% higher pension value on average than those who only took advice once.
Your priorities and circumstances can and will change over time, so revisiting and amending your original financial plan with the help of a professional is a sensible step.
What’s more, building a strong and continuing relationship with a trusted professional means you always have someone to turn to in times of doubt and uncertainty.
Find happiness as well as prosperity
A report by Royal London revealed the top three emotional benefits of financial advice to be greater confidence, feeling more in control, and gaining peace of mind.
It’s no secret that money can be a huge source of stress and anxiety, which is why getting professional support can make such a difference to our sense of wellbeing.
Professional financial planners and advisers are highly qualified, so they can help dispel any myths you may have about money, and ensure you don’t put a foot wrong.
Outsourcing some of the responsibility for your wealth to an experienced third party also gives you much-needed reassurance that you and your money are in safe hands.
Avoid the pitfalls of doing it yourself
It may be tempting to try to save money in the short term by handling your financial planning yourself, but taking this route often proves to be a mistake.
Good financial planners don’t come cheap, but they’re regulated by professional bodies that ensure the advice they give is sound, protection you wouldn’t be afforded when going it alone.
But the biggest barrier to successful financial planning as an individual rather than a professional is often your own in-built biases.
Below are some of the psychological factors that hold us back when making our own financial decisions, showing why it’s better to get expert support instead.
How our psychology stops us from being impartial about money
We don’t always interpret information well
Information overload can mean we focus on the wrong things or get overwhelmed by options. A financial professional has the skills to cut through the noise and make the right choices on our behalf.
We’re tempted by instant gratification
Just because something’s right for us now doesn’t mean it’s the best decision for the long term. Independent Financial planners are able to take a top-level view of our lives and finances, and provide impartial advice and the best steps to take.
We tend to be overconfident
Studies have shown that retirees tend to think they’ll have enough income to cover them in later life. Using the latest tools and software, financial planners can demonstrate the reality of our situation, and guide us through any necessary changes and ultimately give you peace of mind.
We’re not objective about gains and losses
Because we try to place a positive spin on things, we may regard something as a gain that a third party would consider a loss. Your financial planner works for you, but is far enough removed from your personal life to provide you with an objective viewpoint.
We’re inclined to procrastinate
Putting off making changes to a poorly performing investment, or even starting a financial plan in the first place, can have a damaging effect on our wealth. The job of a financial adviser is to continuously monitor your plan and portfolio, and ensure it’s delivering the right results.
We tend to stick with previous decisions
There’s evidence to suggest that people keep their default pension fund option, and don’t change providers when they retire, even if better alternatives are available. A financial planner can make difficult decisions and action this for you, so you don’t have to.
OUR CLIENTS
Matthew did a thorough audit of our current and projected circumstances and guided us through the minefield of financial planning. He’s given us sound advice and continues to proactively look after our portfolio, tipping us off when it’s time to switch or tweak investments.
I previously managed my own investments, but it came to the stage where I was investing fairly significant sums, had less time to focus on it, and was investing on behalf of family members. I decided I needed a second opinion. Matthew has been very helpful, friendly and responsive.
Matthew leaves no stone unturned to ensure that he completely understands your financial position. He explains everything properly, so you can make an informed decision before agreeing to anything. He also acts for my clients as I'm a small business accountant.
Matthew offers a professional service, understanding our goals and needs. He pays attention to our attitude to risk for our family finances and my business. He’s a source of trusted advice for all things financial whenever we need it and has provided us with clear, impartial guidance.
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