5 positive reasons to work with a trusted financial planner

Female adviser talking to clientAccording to FTAdviser, the Financial Services Compensation Scheme (FSCS) has revealed that 78% of the claims it deals with have an element of poor financial advice. The organisation’s chief executive, Caroline Rainbird, explained that while the “vast majority” of financial advisers provided high standards and an important service, there were still some advisers who provided poor advice.

While poor advice is not usually deliberate, the implications for the adviser’s clients can still be significant, and may reduce their standard of living or create financial uncertainty. This is why working with a financial planner you can trust, and who demonstrates high levels of competence and knowledge, cannot be overstated.

Financial planners can provide peace of mind on a myriad of financial issues, expose your wealth to greater growth potential and ensure that your finances are as tax-efficient as possible. Discover five positive ways a financial planner could help you get more from your finances if you’re not working with one already.

1. Keep your wealth on track

For financial planners, a long-term working relationship with clients is central to everything they do. Typically, they do not operate on a “transactional” basis, which means you only receive help from them when you ask for it.

Instead, a planner will review your financial position regularly and help you understand whether your investments and pension are on track to meet your goals. If they are not, the planner will provide options that could help you achieve them.

Research carried out by Royal London reveals that people with an ongoing working relationship with a financial planner are up to 50% better off than those who receive advice once.

2. Consider every aspect of your wealth

A financial planner who is genuinely interested in your financial welfare will take the time to consider every element of your wealth. While you may have an objective in mind, a planner will look at how one aspect of your finances dovetails into another, to ensure any solution or strategy they recommend is right for your overall situation.

In other words, a financial planner will not try to shoehorn a new product into your financial situation, they will carefully assess whether it’s needed and whether it could benefit you.

3. Help inflation-proof your money

According to the Office for National Statistics, inflation reached 11.1% in October 2022. Inflation measures the rising cost of goods and services over time. If you compare this to the amount of interest your money is likely to receive in a savings account, you will see that it is not keeping pace with inflation.

As a result, your cash is likely to be dropping in value in real terms. To demonstrate this, consider the following. According to Moneyfacts, on 16 November 2022, the top easy access savings account offered just 2.65%, and the best five-year deal provided 4.95%.

As you can see, both of these rates are significantly lower than October’s rate of inflation.

Working with a financial planner could help you inflation-proof your money, as they could invest your cash into funds that could provide greater growth potential. Research by Schroders revealed that between the start of 1952 and the end of May 2022, UK equities returned 11.7% a year on average. Cash returned 6% a year.

4. Ensure you’re as tax-efficient as possible

As financial planners consider every aspect of a client’s wealth, they can identify ways to be more tax efficient. For example, they could help you reduce your estate’s liability to Inheritance Tax (IHT).

As IHT is typically charged at 40%, working with a trusted planner could help you leave significantly more money to friends and family. Furthermore, a planner could help you reduce your exposure to Income Tax or Capital Gains Tax by maximising the use of annual allowances and thresholds to significantly reduce your overall tax liability.

They could also help ensure that you maximise the tax relief you receive on pension contributions, which could boost your retirement fund and ensure you can enjoy the retirement you dream of.

5. Create the retirement you want

A major benefit of working with a financial planner is that they can help you plan for your retirement, so that you can achieve the lifestyle you want in retirement. For example, they could help ensure that your pension contributions are enough to provide the retirement lifestyle you want. For more information about this, read our informative blog.

Working with a trusted planner provides peace of mind that you’re talking to someone who fully understands pensions, the tax benefits they can offer, and how they slot into your financial situation.

They will also help you understand the myriad of complex rules around pensions in a clear and understandable way, which will help you to make better decisions around your retirement strategy.

Get in touch

As you can see, working with a financial planner can help provide peace of mind around your money. According to Royal London’s research, 62% of the people questioned who had a long-term working relationship with a financial planner, felt more in control of their finances. This compares to 34% of people who use financial advisers on an as and when basis.

Furthermore, 58% of those with an ongoing working relationship with a planner said they were more confident about their financial plans, compared to 34% of those without an ongoing relationship.

If you would like to discuss how creating a long-term working relationship with us could help you, please contact us on info@janesmithfinancial.com or call 01234 713131.

Please note

This blog is for general information only, does not constitute advice and is aimed at retail clients only. Please do not act based on anything you might read in this article.

All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.



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