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Originally Posted On: https://financialadvisers.co.uk/blog/?id=9&pl_title=Why%20Should%20I%20use%20a%20Financial%20Adviser
Looking into retirement options and wondering what to do with your pension funds? Financial advisers can help you identify and achieve your goals by providing the crucial perspective and strategy you need. Keep reading for our top reasons to hire a financial adviser and how it can affect your return on investment in the long run.
What Does A Financial Adviser Do?
If you’ve always managed your own portfolio or done very little with your pension funds, you may be wondering why hiring a financial adviser is necessary. It’s a great question, but there are some key reasons why a financial adviser can help you achieve your goals:
1) They Can Help You Achieve A Higher Return
Hiring a financial adviser can actually help you increase your returns by about 3% each year. This is a significant difference when you think about long-term investments and year-over-year returns.
Several factors come into play here:
Finding The Right Combination Of Investments If you’re doing research on your own, comparing financial products, and trying to time the market, chances are your returns will be all over the place. It’s hard to keep track of how the market is moving, how current events are going to affect things, and whether or not an investment is high-quality enough to hold onto. It can also be tricky to find investments that take your risk tolerance into consideration — how much fluctuation you are comfortable seeing in your portfolio. For example, if you are close to retirement and in an entirely equity-based portfolio, you may be way too aggressive for this key life stage. A portfolio around the time of retirement should typically be filled with more stable investments, like bonds and mutual funds, and fewer stocks to help cushion any significant fluctuations that may occur. Financial advisers can help you adjust your portfolio — only as needed — to keep you on track toward your goal while achieving the return you feel most comfortable with.
2) They Can Offer Unemotional Advice
It’s hard not to be emotionally attached to your money. After all, you’ve worked hard to earn it, and the last thing you want is to see it disappear in a faulty investment. That’s where a financial adviser can help. A financial adviser offers sound counsel and can help you weather even the most volatile markets. In today’s world of inflation, pandemics, and layoffs, it can be easy to get discouraged or want to pull your money out of the market altogether. But when you have a financial adviser managing your portfolio and keeping you apprised of the reasons why things might be shifting around, it’s easier to maintain your long-term approach to investing, the right asset allocation, and actually come out on the other side in better shape than you were before.
3) They Can Keep You On Track Through Key Life Stages There are six main categories that a financial adviser can help you with:
- Planning for retirement
- Saving for education
- Preparing for the unexpected
- Estate planning, including estate tax planning
- Living in retirement
- Tax savings
By sharing your dreams and plans with a professional, you are more likely to achieve your goals! The same is true financially. At the beginning and middle of your career, you are in the retirement planning stages. You are earning money, investing, and actively contributing to your portfolio. You may start to have kids during this period as well and may want to provide education funding for them to draw from. That means you have two competing goals that need to be balanced and funded. In addition, having life insurance in place can protect you and your family when the unexpected things in life happen. A financial adviser can walk you through this process and help you select which product is right for you. As you near retirement, you’ll likely want a portfolio or pension review to help you properly allocate your funds moving forward. Knowing how much you’ll need in retirement is a huge part of investment advice! The last thing you want is to run out of money because you didn’t plan ahead properly.
4) They Can Work With Other Professionals
We hinted at it above, but this is so important it deserves its own section. Financial advisers can work with tax professionals and help you plan your estate. This is crucial to ensure you aren’t paying unnecessary penalties from withdrawals, have optimised your portfolio to account for things like capital gains tax, and have all of the necessary protections in place in the case of your death, such as a Power of Attorney. Without all of these pieces working together, you could accidentally be leaving money on the table, or your family may be paying taxes on the money they inherit unnecessarily. Having a financial adviser to essentially quarterback the financial team ensures everything is in place the way it needs to be so you and your family have peace of mind throughout every stage of life.
Why You Should Hire An FCA-Certified Financial Adviser
If you are nearing retirement, you need a pension review and a portfolio review. But don’t trust just anyone with your investable assets. Trust an FCA-certified financial adviser. With a database of over 15,000 firms and 60,000 advisers, you can easily browse and find the right one to fit your needs. Whether you’re looking for comprehensive wealth management, insurance, debt help, pension transfers, investments, or portfolio consolidation, we are here to help. Our list of financial advisers can offer expertise and guidance for which combination of investments best fits the key life stage you’re in and create a tailored strategy just for you. With compiled reviews, work history, location, and contact information, you’ll be on your way to the professional guidance you need in no time! Simply input what you’re looking for, browse the directory, and select which financial adviser to reach out to. Finding the investment help you need has never been easier!
