5 Ways a Financial Planner Adds Value

By December 12, 2019Financial Planning

This content is for information and inspiration purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult us.

Has anyone ever given you advice which you look back on and recognise as having benefited you in a life-changing way? Perhaps your parent or grandparent imparted a word of wisdom to you which you have clung to over the years, helping you prosper and grow as a person? If so, what kind of price would you put on that?

It’s hard to quantify the value of great advice and wisdom, but we intuitively recognise that it is immensely precious. Here at WMM, our financial planning team has the privilege of working in this realm every day. It’s one of the most rewarding experiences in life to offer wisdom to clients about their financial affairs, which then often transforms their quality of life and future prospects. It’s also hard to quantify in pounds sterling.

What are the precise ways a financial planner benefits you? In this digital world of increasing “self-help” financial coaches and “robo-advisers”, what value can a human financial planner really offer you? In this short guide, we’ll be sharing just five of many possible ways they add value.


#1 Simplifying financial affairs

Many people have highly complex finances. Perhaps you have multiple pensions, and possibly some of them are lost. Maybe you have several old protection policies which are meant to cover you in the event of serious illness, but aren’t sure how they relate to each other or where they need bringing up to date. Or, it could be that you have a complex set of investments which don’t really work well together, are not organised in a tax-efficient manner and which face high fees.

One of the benefits of working with a financial planner is that they can help you sift through all of these various elements. He/she can then start to group everything together in an organised, clear way; identifying areas which can be consolidated to make everything simpler. If you have ten pensions, for instance, a financial planner can help you track them all down and possibly bring them all into fewer more cost-efficient pots.


#2 Illuminating & correcting blind spots

No financial adviser can predict the future, yet they can leverage their qualifications and experience to help you address weak areas in your portfolio. In 2019, there have been a number of funds which have been suspended and have even collapsed, due to terrible investment performance caused by poor fundamentals. One prominent example was the collapse of the Woodford UK Equity Fund, which declined from a high point of £10bn to around £3bn. More recently, we’ve had the M&G Property fund which has had two trading suspensions and delivered weak returns (despite clients paying £100m in fees since 2016). Liquidity problems such as these cannot always be fully spotted beforehand, yet having a financial planner to assist you can go a long way to helping you allocate your investments more strategically – eliminating unnecessary risk.


#3 Giving reassurance

Are you worried about how the economy might affect your investments? Do you currently suffer from anxiety about what will happen to your home if, one day, you need to go into long term care? A financial planner can bring a calm, rational voice and list of facts to these fears. Together, you can then work to put appropriate measures in place which address them. For instance, to help you prepare for the possible costs of your care you might consult your planner about how to build up a sufficient nest egg to carry you through this time. You could also talk through other options you may not even be aware of, such as an immediate needs annuity.


#4 Preventing errors

The United Kingdom has a lot of consumer protections enshrined in law and ways to make an appeal if things go wrong (e.g. the Financial Conduct Authority and Financial Ombudsman). Nonetheless, many people across the country are still vulnerable to sophisticated scams seeking to cheat you out of your savings, pension or investments. Some of these occur during unsolicited calls about a “hot stock” with “guaranteed returns”, but many are increasingly happening online. A good financial planner will be familiar with all of these tactics and can act as a vital information source to help protect yourself. If you are at all unsure about an investment offer presented to you over a cold call, you can run this past your adviser. They can then tell you whether it is legitimate or not, potentially helping you dodge many bullets over the years.


#5 Acting as an impartial sounding board

For many big decisions in life, we often turn to trusted friends and family to “air out” our thinking, to gain their counsel. Perhaps you’re not sure about moving to another part of the country for work and need a second opinion. As precious as these people are, they’re not usually the best to talk to about your pension, inheritance tax planning or investment strategy!

If a decision is weighing heavily on your mind about your longer-term financial affairs, then one of the best things you can do is consult an impartial, experienced professional who understands the intricacies of what you’re talking about. Sometimes it helps just to voice your concerns as they carefully listen. In specific moments, they can ask focused questions which you might not have thought about, often shedding new light on the situation and giving you pause for thought. As you do this over many years with the same financial planner, the better they get to know you, the more you gain a trusted guide. This person could then help other members of your family facing similar worries or questions.


Final thoughts

Here at WMM, we believe there are many benefits to working with a financial planner. However, you still need to ensure that you pick the right professional for your needs. Lots of businesses can look good on paper, but it’s important to also meet different financial planners to establish trust and chemistry.

When it comes to your investments, also make sure you ask for the firm’s Investment Policy Statement. This should set out the types of funds or assets they invest in and why. This will give you more insight into their investment approach and philosophy, allowing you to get a better sense of how they would help to manage and grow your wealth.

If you are interested in starting a conversation about your financial plan, then we’d love to hear from you. Get in touch today to arrange a free, no-commitment consultation with a member of our friendly team here at WMM.

Reach us on 01869 331469