With the coronavirus forcing many of us to re-evaluate our lives, and to prioritise what’s most important, thousands of people have realised the advantages of getting professional financial advice to help them reach their goals and protect their family.
The pandemic has certainly helped to focus people’s minds on things that they may have been putting off for a long time. For many, reviewing their financial situation has been a necessity, as many individuals have been put on furlough, lost their job, or chosen to retire early.
So, it is no surprise that since COVID-19 interrupted everyone’s lives more than a year ago, there’s been a sharp increase in the number of people seeking financial advice. Here at FAS, we have noticed a significant number of new clients talking to us about protection products such as income protection and critical illness cover. We have also seen a rise in demand for retirement and estate planning advice, as more people have decided that they need to make decisions now about their future.
However, the rise in the number of people seeking financial advice has been met by an expanding range of options available to individuals. In recent years, a number of large investment companies have widened the services they offer clients to include financial advice. However, it is important to recognise that there is a huge difference between financial advice designed to sell you products, and a more comprehensive financial planning service designed to look after your needs.
The meaning of ‘restricted advice’
If your high street bank or big-name investment provider tells you they now offer financial advice, you can be certain that the advice they give is of the ‘restricted’ variety. Being ‘restricted’ means an adviser can only recommend products from a limited selection or product range (usually the bank or investment provider’s own services), not from the whole of the market.
Using a restricted financial adviser doesn’t necessarily mean you’ll be getting ‘bad’ advice. All financial advisers must have a similar minimum level of qualifications and meet the same standards. It just means that the choices available to you may limited, and the advice they give you might not be in your best interests. They might only be able to suggest a pension from one pension provider, for example. Your options could be drastically reduced, because they won’t have access to the widest choice of products available. More importantly, after they’ve sold you the product, their job is done so you run the risk of experiencing a very shallow, transactional approach, when you might well be in need of more comprehensive financial planning.
The meaning of ‘independent advice’
Independent financial advisers, on the other hand, are so much more than salespeople. We believe financial planning is more important than just recommending where you should put your money. It’s our job to help you plan your goals in life, consider your personal circumstances and help you decide on the best course of action.
In the case of pension planning, an independent adviser will research every relevant pension available within the UK market to find the one that they believe is best suited to your needs. They will then make a recommendation and provide you with the reasons that justify their decision.
In fact, recommending products is just a small part of what we do. We tailor our advice to suit your needs, and we will never recommend a product that is not suitable for you. We will always provide you with clear, comprehensive reasons behind every recommendation we make.
Creating your bespoke financial plan and carrying out regular reviews
There are other advantages to be gained from talking to an independent financial adviser over a restricted financial adviser tied to a larger organisation. For example, we can help you to set clear goals and create a financial plan that covers all eventualities. And, whether you like to keep on top of your investments and finances regularly or just every now and then, we can make sure that your finances stay on track, and alert you to important changes of rules and regulations that may come with tax implications or that you may be able to take advantage of. With us, you will not end up feeling forgotten after you have signed on the dotted line.
Tax planning and tax efficiency
One area in which independent financial advisers excel over the new breed of restricted financial advisers comes with navigating the complexities of the UK tax system. Whereas financial advisers who work for investment companies or banks may be well-versed in the benefits of their own company’s products and services, they may not be so well-equipped with helping you with tax and estate planning. We can provide a comprehensive service that takes tax planning into account, and potentially reduces your tax obligations in the process.
Summary
Good independent financial advice can make a real difference to your quality of life, at any age. At a time when many people are thinking more deeply about their personal finances, as well as their goals and future plans, talking to an independent financial adviser who is capable of giving impartial, expert advice is still the most cost-effective way to help you get there. If you receive advice from an independent financial adviser at FAS, you can certainly feel confident they are working solely for the benefit of you, and no one else.
If you are interested in having a discussion with one of our experienced financial planners, please get in touch here.
This content is for information purposes only. It does not constitute investment advice or financial advice.
