Financial advice: What are the benefits?

Even if you don’t maintain an ongoing relationship with your FA they can help you with occasional reviews. They are able to take a holistic view of all your savings, investments, outgoings, and plans, which can help you take stock and consider your options. In effect, it’s like an MOT for your financial life, making sure what you already have is working as planned, and considering what might be on your horizon to plan for.

Some financial advisers will do their own investment management, managing portfolios and checking on progress. Some will use a third party investment manager to do this on their (and your) behalf.

Good questions to ask your adviser when looking into investing include:

• What are the best- and worst-case scenarios for the value over various periods of time. The timescale will vary, depending on how long- or short-term your plans are.
• What are the total costs for the investments, and how do they stack up against the potential growth?
• How does the adviser inform their decisions about investment choices, and how often do they review them?
• How well-established/experienced is the adviser and their team?
• If they manage investments “in-house” is there a committee which oversees the process and holds the investment manager(s) to account?

Helping you understand how to make the best use of allowances and tax breaks, so you can be more efficient with your money. Not every financial adviser is a tax expert, so it’s good to check if this forms part of their service.

Giving thought to how to pass your assets on to the next generation is very important, as the threshold for inheritance tax (IHT) has not changed in decades, while incomes and property prices have increased considerably.

A financial adviser can help you with

• Understanding what your retirement will likely cost, and how much you can afford to give away
• Ensuring you have an up-to-date will
• Planning for IHT
• If relevant, helping you set up and manage trusts

Pensions can feel like a complex world in their own right. Professional advice can be indispensable, especially if you find you have several workplace pensions form different jobs to keep track of, which is increasingly the norm.

Your financial adviser can help you

• Set up and choose how to invest your pension
• Assess your income, timescales and goals for retirement, and provide realistic advice on how to achieve those goals
• Regularly review your pension investments
• Guide you through how to make the best use of allowances and tax relief
• Model your cash flow ahead of retirement, and once you have retired
• Help you understand the implications of withdrawals in terms of taxable income and also the effect on your remaining pension pot
• Helping to make sure you don’t outlast your money!