Do you have the time to keep fully up to speed with everything that’s going on?
With a burgeoning choice of products on the market, and considering the busy lives we all lead, it can be difficult to find the time to keep fully up to speed with everything that’s going on – especially when you consider that financial products are unlikely to remain the same throughout your lifetime. Obtaining professional financial advice enables you to discuss your objectives, understand which products are available and identify which will best suit your investment needs.
Keeping a regular check on financial plans
Lifestyles change as time passes, and it’s important to keep a regular check on our financial plans. It is likely that the balance of investments in your portfolio will need to evolve, not only in line with changing market conditions but also with factors such as your investment goals, your personal circumstances and perhaps most notably your age. Obtaining professional financial advice will ensure that your plans remain on track, especially when the time comes to retire.
Losing out on thousands of pounds
However, a worrying number of people aged over 55 are not planning to take financial advice when they retire. This means people risk losing out on thousands of pounds over the course of their retirement, leaving the UK on the cusp of a ‘mi-buying’ crisis, according to research from LV=.
Increase the take up of advice
It is a year since the Financial Advice Market Review (FAMR) report published 28 recommendations to help make financial advice more accessible and affordable for people. While progress is being made to increase the take up of advice, it is currently worryingly low. Six in ten (61%) approaching retirement still say they don’t plan on using a professional adviser, and half (52%) think they can make the right decisions without advice.
Difference between guidance and advice
One of the reasons for not taking financial advice appears to be a lack of understanding of what it offers, with a third (33%) not certain they know the difference between guidance and advice, and just one in five (22%) thinking it is good value for money. Other reasons given include: people relying on their own research (23%), not thinking they have enough money to make it worthwhile (22%), and advice being too expensive (15%).
Better promotion of the reforms
This demonstrates an urgent need for government, regulators and industry to do more to show the value of advice, including better promotion of the FAMR reforms. Two of the recommendations from the report came into effect in April: the Pension Advice Allowance and the tax-break for employer arranged advice. However, knowledge of them is low. Two thirds (68%) of over-55s are completely unaware of the Pension Advice Allowance, and eight in ten (80%) don’t know about the tax break for employer arranged advice.
Flexibility over retirement options
The pension freedoms have given welcome flexibility over retirement options, but this has also created greater complexity; without financial advice, people are at risk of making the wrong decision. The FAMR recommendations help make advice more suitable for the mass market, but much more needs to be done to promote the value of advice, as those who do use an adviser often get more from their money.
Make the most of your hard-earned savings
The poor understanding of financial advice is particularly worrying at a time when people are faced with more complex decisions about retirement than ever before. Taking professional financial advice is vital to ensure you are equipped to make the most of your hard earned savings and receive the income you need in retirement. If you are approaching retirement and would like to discuss your options, don’t leave it to chance – please speak to us.
Lee is a Chartered Wealth Manager and is listed in the definitive Spears Wealth Management Index as one of the UK’s top 10 wealth managers and was named as the Asset Manager of the Year for High Net Worth Investors in the 2015 Spear’s Wealth Management Awards. His uncompromising standards in private client wealth management means he is a regular contributor to the financial press and is often on television discussing wealth management and investment issues.
This article does not constitute specific advice and investors should bear in mind capital invested is not guaranteed. Investment Quorum is authorised and regulated by the Financial Conduct Authority .