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It is natural for investors to consider a financial planner. After all, you likely have a complex portfolio and asset base – all of which needs to navigate an intricate, ever-changing landscape of tax rules. Yet do you need a financial planner, or can you manage things yourself? If you choose to work with one, what qualities should you look out for to get the best person?
In this article, our team at Bure Valley Group addresses some of these questions. We hope you find this content useful. To find out more about our EIS and other investment opportunities, visit our portfolio page here. To enquire regarding our latest projects and funding (for investors and founders, respectively), you can reach us via:
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Do you need a financial planner?
UK financial planners tend to initially offer a free consultation when meeting for the first time. Not only does this give you both the chance to see if you “like” each other, but also lets the financial planner do a bit of a “fact find” to establish what you need (and whether you’d be a good client). As such, if you have some pressing financial planning questions, you could meet with different financial planners to get some free, qualified opinions. Remember, there is no obligation to work with a financial adviser/planner after meeting with them. You can just walk away afterwards.
Other possible options
A financial planner can be helpful to someone with wealth ready to invest, but who is not confident in their abilities. A professional can help educate about different investment concepts (e.g. “equities”) and shed light on someone’s “risk tolerance” so that they can pursue a long term strategy that they are comfortable with.
Moreover, a financial planner can bring their knowledge about complex tax rules to the table – helping you avoid costly mistakes. For instance, perhaps you want to retire early at age 57 and assume that you can do so. A professional might help you see faulty assumptions in your retirement plan and make corrections.
However, there are other options for people with different goals, priorities and preferences. A relatively new feature in the marketplace is “robo advisers” – i.e. investment platforms which provide “ready made” portfolios for people to invest in, depending on their answers to certain questions (e.g. about risk tolerance). These can offer a way to gain some of the benefits of a financial planner, at a lower cost. Remember, a financial planner may take between 1-2% of what you want to invest (for investment advice). From there, there could be a 1-2% ongoing “management fee” each year to provide ongoing insight, advice and oversight services. All of these costs can start to eat significantly into your real returns over time.
How to pick a financial planner
A good starting point is to ask your friends and family. Have they worked with anyone that they would recommend? Just be careful, however, that you only approach people who know a fair amount about money themselves, and who are not easily hoodwinked. After this channel, of course, you can turn online for recommendations.
Two established “financial adviser directories” can be a good place to look for local firms that could help. These are called Unbiased and VouchedFor. Whilst these services use clever algorithms to help filter out financial planners that may not be right for you (e.g. they are too far away), they cannot guarantee that the options you are presented with are good. Here, you can use directories to create a list of possible options and then do more due diligence to refine it.
For instance, take a look for any independent reviews from people who have used these company’s services before. TrustPilot, Google Reviews and social media platforms can be good places to look. Financial planners’ websites can also feature client stories, testimonials and reviews. These – especially videos – can be very useful for gaining an idea about what kind of people these companies like to work with (and whether you fit the bill).
Also, keep a look out for a “Teams” page on the website to check out the experience and qualifications of the key people involved. If a financial planner holds the coveted “Chartered” status, for instance, then this is a very good sign of competence.
From this point, you can start engaging with your shortlist of financial planners, directly. How do they respond via phone and email? How do you feel when you sit down with them? If they come across as very sales-driven or want to spend lots of time talking (rather than asking questions and listening), then these might suggest that they are not primarily interested in helping you achieve your goals.
One key consideration, of course, is cost. You might like a few different financial planners that you have sat down with. However, you probably want to get the best service for the lowest cost. Here, make sure you clearly understand how each business structures their charges.
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