Your finances are likely to change as your life progresses, so you will probably need different products to tackle saving for retirement as you get older and your circumstances alter. Pension advice for someone just starting a career is very different than that for workers approaching retirement looking to boost their savings.
New rules allowing the over 55s to withdraw pension cash to spend how they wish have also complicated the picture. That’s where professional financial advice comes in.
Is financial advice worth it?
For a saver looking for the best-paying cash account or an ISA, then best buy tables and comparison websites are likely to do the job.
A financial adviser should offer guidance and product recommendations tailored to a saver’s personal circumstances. That’s where expert advice becomes vital.
Different types of advisers
Some advisers can only give financial advice restricted to a small range of products, such as an adviser who can only talk about pensions offered by the bank or financial institution they work for
Independent financial advisers are tightly regulated and licensed to give whole of the market advice to clients, so can draw up a short list of suitable products offered by a range of providers.
The cost of pension advice
Generally, tied advisers working for a bank or financial firm are paid a salary and do not charge for their advice. IFAs will make a charge for their time or a fee related to a percentage of the money the client wants to invest.
What do financial advisers do?
Any relationship should start with a fact find, which is a report analysing a client’s financial affairs, attitude to investment risk and preferred outcomes from buying financial products or investing their money.
At this stage, the adviser should also make clear how they are paid and what fees you should expect. Once the fact find is completed and the fees agreed, the adviser will put forward a financial plan for the client, subject to a regular review.
What if you lose your money?
If the financial adviser is regulated and licensed, then their recommendations are underwritten by the Financial Services Compensation Service, this also gives redress to complain to the official financial ombudsman.