Do I need a financial advisor?

Getting a financial advisor might be the best investment you ever make, but is it really necessary, and do they offer any benefits?

The majority of people go through life without seeking advice from a financial advisor, presumably because you don't always need one to assist you with day-to-day money management.

However, if you think you might never need one, you might be wrong and end up bankrupt.

Certain life events may push you in the direction of one, whether it's for investing purposes, tax liability reduction, wealth protection, or pension planning.

According to a 2017 study by the International Longevity Centre UK, people who do use a financial planner are almost 48,000 richer after ten years.

According to a survey conducted by wealth management company St. James' Place, 84 percent of respondents say using a financial planner improves their mental and emotional well-being.

Regardless of your level of financial expertise, there are several trigger points to take into account that may indicate you need to consult a financial advisor.

Lisa Conway-Hughes, the founder of LCH Wealth and a chartered financial adviser, contends that people should consult an adviser based on their stage of life, whether they have inherited money, or whether their income has increased.

"A financial adviser can help you think about what your plans are for the first 10 years of retirement and adjust your portfolio to match that," she says. "For instance, if you are at least 10 years away from retirement, they can talk about what assets you should be holding and for how long."

"DIY investors aren't always right; for instance, occasionally we see portfolios that are just excessively biased towards the US.

Here are some things to consider if you need a financial advisor.

Money and moments that change lives.

Even though you are seasoned and confident with money, there are a number of life events that may necessitate the assistance of a financial advisor, even if you are not in need of one to open a bank account or set up your ISA.

This comprises:

Making more than £100,000. When you make more than 125,140, your personal allowance drops to zero. if retirement is at least ten years off. To make sure you meet your retirement objectives, a financial advisor can talk about the assets you should hold and how long you should hold them. Financial advisors can assist you in investing by matching your portfolio to your requirements. Examining inheritance tax to see how you can lower your IHT liability. A financial advisor can assist you in making meaningful use of a sum of money that could change your life. Although 29% of over-55s who have already retired are not enjoying the retirement they had hoped for, according to Canada Life, guidance and advice can help people manage their expectations and get back on track.

Of those who retired, one in ten (11 percent) wished they had made better plans because they did not fully predict how much money they would require in retirement.

To feel in control and enjoy your later years, it is essential to plan your retirement and make sure it is adaptable enough to handle the numerous obstacles you will encounter, according to Tom Evans, managing director of Canada Life. One essential step in that process is hiring a qualified financial advisor early on. In addition to offering assistance with taxation, investment selection, and product selection, an adviser can also guide you through any unforeseen roadblocks.

Creating a stable financial situation.

Consulting an advisor can improve your overall financial well-being in addition to helping you create financial security.

Using a financial planner helps 84% of respondents emotionally or psychologically, according to a survey conducted by wealth management company St. James' Place.

Seeking expert assistance is also a good idea if making important financial decisions is causing you stress.

What is the cost of hiring a financial advisor?

There is a fee if you are looking for professional assistance. The majority of the time, however, the benefits greatly exceed the costs.

Financial adviser fees typically range from 1 to 1 percent of your total investments.

You can hire a financial adviser for a set fee, which could be hundreds or thousands of dollars, if you need to see one for a one-time reason, such as because you have inherited a sizable sum of money or perhaps even won a sizable Premium Bonds prize. The amount of work required will determine the final cost.

The government MoneyHelper states that some advisors charge an hourly rate of between £75 and £350.

An ongoing service charge will be required if you choose to remain with your financial advisor for the rest of your life. If you choose this course of action, be sure your advisor is making a living and routinely assessing your financial situation.

You can talk about the best structure for you during your initial consultation, which is frequently free.

Additionally, it's important to keep in mind that many advisers have a minimum asset threshold, which can be as low as £75,000 to £250,000. If your wealth is too small, they are unlikely to accept you as a client.

Finding a financial advisor: what are my options?

Speaking with a few financial advisors beforehand is a smart idea. Working with someone you feel comfortable and can trust is something you should aim for.

Conway-Hughes continues, "Go for it if you get a good feeling from them and they have the right qualifications."

The bare minimum you're searching for is a level 4 diploma. Verify whether they are also a member of organizations like the Chartered Institute for Securities and Investment or the Personal Finance Society.

A financial advisor can be found through Vouchedfor or Unbiased. Asking friends and family for recommendations is another option.