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Eyeing up the Price or Weighing up the Value?

Savers who take advice are £47,000 better off

The famous American investor Warren Buffet once said “price is what you pay, value is what you get” *.  This quote has become one of the most well-known phrases in the investment world ever since but it is also a concept we can apply to many aspects of our lives. 

We can ponder it when we evaluate: -

- The job the tradesman has done for us during lockdown

- Or our own DIY attempts when we couldn’t get a tradesman quickly enough

- The costs for an Architect’s drawings before starting work on an extension or building project, which the drawings then let you visualise

However, when we apply this to our financial decisions, the thinking is less clear. 

It has been said that the great British public are not particularly fond of discussing our financial affairs with our friends or colleagues (and in some cases, even our own partners).  Yet we look across the water at our American counterparts and find they may be happy to discuss their investments in the portfolio of their 401k (that’s a pension to you and I) with their taxi driver on the way to the airport or a restaurant – it’s often a current and lively debate.  Whilst this might not be the most advisable strategy, it does indicate a level of engagement in financial decisions and planning that maybe we could learn a thing or two from?

So how do we consider this in terms of assessing the value of financial advice?  Well, one such study designed to assess just that, was conducted by The International Longevity Centre and published late last year**.  It found that savers who received financial advice between 2001 and 2006 were able to boost their pension wealth by £31,000, while also experiencing a £16,000 uplift in other areas of financial wealth, as measured in the two-year period 2014-16.  This meant that holding other factors constant, those who took advice were on average £47,000 better off a decade later than those that did not.  Not a bad result.

In the current economic environment, it’s more important than ever that you’ve got someone who can help you look after your finances. 

We no longer use a mangle to dry our clothes, send messages via fax machine, or rent videos from shops. Likewise, financial advisers no longer just want to “sell you some insurance” – they are focused on delivering the best outcomes for you and your family.

So what DO they actually do and why should you consider speaking to one?

Here are seven things you might not know a financial adviser could do for you:

  1. Personal and tailored advicea financial adviser will find a solution that’s right for you, rather than just hand you an off-the-shelf, one-size-fits all solution. They’ll ask you questions about you, your job, family and lifestyle to get a full picture of who you are and what you really need – whether you’re a first-time buyer, a business owner, starting a family, or preparing for retirement.
  2. Knowledge of the marketan independent financial adviser isn’t tied to a particular bank or provider, which means they can research the whole market to find the right product for you. Because of this, they could have access to products that are more suitable for you than those available online.
  3. Peace of minda financial adviser will find out what financial products you already have, even if you’re not sure where the paperwork is. They’ll look at what financial support your employer provides, and confirm what you’re entitled to from the state. They’ll tell you where the gaps in your finances lie so you only buy what you need to. And they can advise you on things like tax and trusts, which many of us can find complex. Talking to a financial adviser will give you the peace of mind that all your needs have been considered.
  4. The buck stops with themwith something as important as your finances, you don’t want to worry that you’ve got it wrong. A financial adviser, on the other hand, is a specialist in this area. They’ll keep up-to-date with the latest products and changes in the market, and take responsibility for making the best choice on your behalf.
  5. Practical helpwhen you start to take your retirement income, your adviser will help you with this. It’s an adviser’s job to support you throughout your partnership with them.  They will bring to life a picture of what retirement might look like using financial modelling software, compared to the pile of paperwork you have filed away in the cabinet.
  6. Proactive supporta financial adviser can provide ongoing support to make sure you’re on track to meet your objectives. For example, you may need to alter how much you are saving in your pension or how much income you’re taking from your pension because your circumstances change.  Rather than leaving you to manage this yourself, your adviser can make the relevant changes so your plans are always valid and up-to-date.
  7. Save you time and money - Good financial planning and advice will guide you towards the best and most cost-efficient solution for you. Whether this means saving money or helping you fund your future through investment, seeking professional advice will save you the time and energy of trying to filter through the various options and products that are available to you online. 

It’s true that we can buy so many things ourselves online now without having to go through a middle man, but when it comes to something as important as our finances, it pays to go to an expert : the value often outweighs the price

At Retirement & Investment Solutions, we are committed to providing you with professional, independent and transparent financial advice.  Our advisers would be delighted to offer you a free (no obligation) consultation to discuss your financial position and give you the chance to assess the value for yourself.  Please give us a call on 01786 431 703 or drop us an email at info@retinvest.co.uk to arrange your free consultation.    

Sources:-
* Warren Buffet’s 2008 letter to the Berkshire Hathaway’s shareholders

** https://www.ftadviser.com/your-industry/2019/11/28/savers-who-take-advice-are-47k-better-off/

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