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Many people think that having a financial adviser is not for them as they are not ‘well off’ enough. They consider that financial advice is a preserve of the wealthy and that you must have a lot of money in order to get lots more money.
The Advice Gap problem
This ties in nicely with the ‘Advice Gap’ problem that is well documented. Those in ‘the gap’ are effectively people that need financial advice but don’t have the means (or wealth) to access it. Unfortunately, it is often people who have less that need greater intervention from a financial adviser, whose advice is probably more meaningful and valuable.
However, regardless of your current wealth, a financial adviser can create a road map for you to help you plan for a secure financial future. This plan could include investments, pensions and protection such as life assurance.
How financial advice can benefit people from all walks of life
Michael Hawthorne has met many people from all walks of life and financial situations through the course of his job as a Chartered Financial Planner at True Bearing and has the following advice for anyone who read the first half of this blog and thought ‘that’s me!’;
“I would suggest that anybody with a financial problem that feels that they do not have enough should get in touch – we offer a free consultation and if financial advice is the right course of action, we will be able to share why we feel this is the case. If not, we will highlight where best to go for that help for instance, The Money Advice Service gives free guidance on money matters or the Citizens Advice Bureau might be a better place to help.
We have a minimum fee of £795 so we carefully consider whether it appropriate to pay that for the advice we provide. For example, if we look at somebody who comes to me wishing to set up an investment with £10,000 for 5 years. If this individual were to pay £795, they would need to make £795 in interest just to break even - it’s not really cost effective and in isolation, I would not give advice in this instance. However, it is a different story with £30,000 to invest! If somebody is looking to start a pension with £200pm but saving for 40 years, the £795 is far more cost effective and will benefit from the advice.
My recommendation is to take advantage of the free consultation, get an independent opinion and agree a course of action from there."
At what point should you get a financial adviser?
As an alternative to thinking about a number before contacting a financial adviser, we would instead suggest thinking about financial triggers or changes in circumstances. These are points at which an individual could seek and benefit from financial advice. These may include one or more of the following:
- Higher rate tax - a salary of over 50k earnings and anyone with over £100k definitely needs to speak to an adviser
- Someone with a high disposable income who may be looking to make some provisions for the future. This is subjective but if you have £200pm or more earmarked for the longer term then a financial adviser could help you.
- Little disposable income but with debts including mortgage and/or young family – there will be a need to have greater insurance at this point in your life
- Transitioning from one employer to the next or consultancy and self-employment which may bring a change in employer benefits ie. protection and pensions
- Accruing over £30k in savings
- Receiving an inheritance
- Fully paying off the mortgage meaning that you have a higher disposable income
- Getting married or divorced
There are so many ways in which we might be able to help and the trigger shouldn’t just be about a number. The first appointment with an Independent Financial Planner at True Bearing is always at our expense so get in touch with us today.