Chief Executive at FEIFA / FECIF Secretary General
10 reasons to use a Financial Adviser
Many people have the perception that only the very wealthy need financial advice. However, the facts are that anyone can potentially benefit from such advice. Not only can financial advice be beneficial in helping people protect and build their assets, it can also assist in making the most of investments to help secure the long term future of an individual and their family.
TO PROTECT YOUR FAMILY
An adviser is an asset in this instance as they can recommend the most appropriate policy for your particular needs. They will assess your position and guide you through the best options to protect yourself and your family - taking into account your marital status and position in life, and whether you have dependents or not. Whatever your needs, an adviser can help you protect your family and ensure that if your financial situation changes you avoid a financial crisis.
TO HELP PLAN YOUR SPENDING - AND SAVING
To secure your long-term future, you need to build assets - initially to sustain you through the rainy days and then to pay for holidays and other luxuries. Step one is to plan your spending so that you begin to save - and step two is to have a savings plan so that you can build your wealth as efficiently as possible. Regardless of whether you currently have €10 or €10,000, a financial adviser will examine your personal situation and find the best starting point for you.
TO HELP YOU PLAN FOR RETIREMENT
Once you have resolved your short and medium-term saving needs, you can then start thinking about the long term - most people nowadays realise that they cannot rely on the State for anything more than the absolute basics. However, planning for retirement is a complex business and there are many different options available. Pensions have come a long way in terms of flexibility and transparency in recent years and now generally offer a far wider range of investment choices. A financial adviser will not only help you sift through the many rules and product options, but will also help construct a portfolio for you to maximise your long-term prospects.
TO SECURE YOUR HOUSE
The mortgage market has always been complicated, with its discounts and variables, annual equivalent rates and caps, indemnities and early redemption fees. In the aftermath of the credit crunch, mortgages have become even more complex, and lenders’ requirements have become more stringent. Nevertheless, buying a house is still one of the most expensive decisions we make, and the vast majority of us require a mortgage. Furthermore, it goes without saying that it is vital you keep up your mortgage repayments as your home may be repossessed if you don't.
A financial adviser could save you thousands of Euros on your mortgage, particularly in the current turbulent times. Not only can they seek out the best rates, they can help you assess sensible levels of borrowing, maximise your deposit and perhaps also identify suitable lenders who would otherwise be unavailable to you.
TO HELP MEET YOUR INVESTMENT GOALS
As you progress through life, you start to accumulate your assets and your income will rise. You then start considering how you can enhance your position rather than simply consolidating. This could mean anything from looking to retire early to paying school fees for private schools for your children, or investing in overseas property. Your dreams evolve and a financial adviser can help assess what is realistically possible - and put a sensible plan in place to help you achieve your goals.
TO FIND THE RIGHT COMBINATION OF ASSETS
Investment is as much about protecting against potential downsides as it is about targeting maximum growth. High returns are often associated with high risk - and not everyone is comfortable should their investment value fall by certain amounts in a short period. A financial adviser will make a detailed assessment of your attitude to risk before making any recommendations. They will also ensure you do not put all your eggs in one basket by helping you diversify not only across asset classes but also across accounts, individual funds and product providers.
TO OBTAIN AN OBJECTIVE ASSESSMENT
Every new investment opportunity or product is likely to be accompanied by hype, proclaiming it to be the best opportunity ever - but that does not necessarily mean it is right for you. Investors the world over have been, and will continue to be, caught out by market bubbles or high charges because they do not take a step back and view the big picture, considering all the pros and cons. A financial adviser knows how products and assets work in different markets and can outline the possible benefits as well as any potential downsides. Between you, you can then make a more informed decision about what you can and should believe - and what products you should be avoiding, as they aren't suitable for your situation.
TO SAVE MONEY
Once your risk and investment assessments are complete, the next step is to consider tax implications and even the most basic overview of your position could help. It may simply mean using a particular product to benefit from government incentives, or it could mean choosing growth-focused assets over income in order to make use of capital gains allowances rather than paying income tax. Alternatively, for more complicated arrangements, it might mean moving assets to your spouse or children to take advantage of their personal allowances. A financial adviser will always have your tax position in mind when making investment recommendations and can help point you in the right direction, even in complex situations.
TO KEEP YOU ON TRACK
Even when your investments have been put in place and are running to plan, someone needs to keep an eye on them in case changes in markets or abnormal events push them off course. You can request that a financial adviser undertakes this monitoring for you. They can assess the performance of individual investments against their peers, ensure that your asset allocation does not become distorted as markets move, and help you consolidate gains as the deadlines for your ultimate goals are approaching.
FOR PEACE OF MIND
Money is a complicated subject and there are many things you need to consider in order to both protect it and to make the most of it. Markets are volatile and the media are prone to exaggerate both the risks and the rewards. Employing a good financial adviser can take the pressure off you and place the job in the hands of an expert. Whether you need general, practical advice or a specialist with dedicated expertise, it is likely that, in the long term, the money you invest in this expert advice will be paid back many times over making it money well spent.
I would like to thank “Adviser Hub” for much of the content of the above, which is adapted from its online guide “10 reasons to use a financial adviser” (www.adviser-hub.co.uk).
Chief Executive at FEIFA / FECIF Secretary General