If you can’t answer these seven questions about your finances easily, then you probably need a financial adviser.
Many investors consider financial advisers as a bit slick and an unnecessary but significant cost that reduces their personal worth.
Not many would boast a financial adviser as a friend because after the past few years as few trust their honesty or judgement.
So have a think about these questions:
- Do you have financial and lifestyle objectives, and if so, what plans do you have to achieve them?
- How much money would you like to fund your retirement and how much will you actually have?
- Is your pension performing well and can you make any improvements?
- Will your family pick up enough cash from life insurance to make them secure if something happens to you?
- Do you get value for money from your mortgage and savings rates?
- Are you making the best of any available tax breaks?
- Do you know what you are worth?
If you can’t pinpoint the figures right away, you probably need some financial first aid.
One of the issues is priorities. At one stage in your life, pensions and savings may not seem as important as other financial issues, especially if money is tight, but saving for retirement from an early age makes the whole task a lot easier.
Putting a little aside over a long term is often better than trying to build a cash pile in a short period.
Another issue often thought about but not acted upon is making a will. Wills are a cornerstone of financial planning and the discipline of sitting down and listing your assets and liabilities provides the basis for the rest of your financial plan.
Once you have decided whether you need a financial adviser, then you must choose the right one for you.
Start with independent. You want an adviser who has no ties to a specific provider or group of providers. For instance, taking financial advice from a bank narrows choices because the bank can only advise on their own products, which are not necessarily the best or cheapest.
Next think regulated. You want recourse to an independent body that can arbitrate any complaints and enforce any findings. You also want to know that your money is protected if you receive bad advice or the IFA ceases to trade.
Visit the Financial Conduct Authority website for regulation information