Full Fat Advice
Traditional financial advice offered by real humans(!). Your adviser will work though a financial plan with you, and your family, making sure that everything is set up just right and that you understand the journey you’re embarking on.
In recent years, professionalism has jumped and there are some seriously good financial planners out there who can save you £1000s and give you invaluable peace of mind. This route is particularly worth considering for pensions or more complicated stuff where mistakes can be really financially damaging. Probably not needed for those in their 30s and 40s with pretty simple needs, who just need to sort an ISA and a pension.
What’s the damage?
Let’s get down to business here. Full fat advice doesn’t come cheap and typically involves signing up to an ongoing service paid for as a % of your assets. These days financial advisers (or planners) do not get paid by commission for investment or pension advice - there is a separate fee for the advice which should be fully disclosed.
Don’t be afraid to ask someone to give you a precise breakdown of every single fee you would pay. If they can’t tell you, go somewhere else.
- Expect to pay between about 1.5% and 2.5% a year for all advice and products.
- Hourly advice ranges from about £150 - £300 an hour.
- Not really an option for anyone with less than £75,000 - £100,000 in savings, investments or pensions but do check.
It's important to flag that a growing number of advisers do it slightly differently and will charge a fixed fee, often based on complexity of needs rather than the total amount you have to invest. We've added this as a filter in our adviser table to help you seek this type of advice, if it floats your boat.
You should also have the option to pay a fixed fee for a specific piece of advice, rather than sign-up to an ongoing service. Again - ask the question!
Sometimes we have a specific problem that we need immediate help with. And sometimes we just need someone to take charge, whether it’s time or confidence that we lack.
A lot of planners see themselves as more than just providing you with the ‘perfect’ financial solutions; they will be a trusted voice, give a helping hand when life gets complicated and things hit the skids, and be with you on a journey, helping us wade through those financial cowpats.
Here are some things where advisers can really help you out:
Never fun and typically financially complicated. Advisers can help put some logic into discussions about maintenance and childcare payments, using a tool called 'cashflow modelling'. What do the kids actually cost to support? How might this change moving forward? Pensions are also a big one for people getting divorced, and sometimes forgotten. They might be less emotive than the family house but they could also be almost as valuable.
2. Saving for a family
Often something which prompts people to seek advice, the thought of children suddenly brings a new meaning to the word 'responsibility'. As well as sleep deprivation, babies often bring up all sorts of questions about life insurance, wills, savings accounts, cars, houses, school fees - this list doesn't sound cheap or easy but an adviser can help you make a plan and take it one step at a time.
What to do and where to start if a sudden lump sum is heading your way. Sounds like a nice problem to have, right? A large chunk of our mailbag is from people who anticipate receipt of a material lump sum, suddenly presenting problems which they have not faced before. With interest rates so appalling low, leaving it in the bank is just not viable. An adviser can help you to consider the right home for your money, to map to your timeframes and needs and risk profile. And also to consider tax and how you structure things.
Avoiding poor decisions, how to take your cash-free lump sum without paying more tax than you need to, whether to move that final salary scheme or not, how to think about drawdown and not run out of cash (or take too little because you're nervous). Retirement is complicated and we see people make expensive mistakes. When to take cash? How much? Drawdown or annuity? Maybe both? And how much income to take. Lifetime allowance (recently frozen so it will hit more of us).
Blimey. If we had to pick one area where good financial advice is really important it would be about pensions and retirement.
5. Leaving a legacy and inheritance tax
How to structure your affairs so you don't fall into tax traps and estate nightmares; someone to help your dependants with the financial spreadsheets in the event of your death. Even if you think you are pretty well sorted - what about your family? Could they use some help?
These are some examples of what prompt people to seek out advice. But just as often it is an ongoing sense that it's all too hard and you want someone who's got your back.
What do they actually do!?
Most advisers will offer a no obligation phone call or Zoom to have a chat and explain what they do. It will vary but advisers will typically:
- Look at all your financial affairs from mortgages, savings, investments, pensions and yes, even those spending habits. Yes, those takeaways do add up :0)
- Make sure you’re as tax efficient as possible
- Utilise your annual tax allowances EVERY year where possible
- Implement structures to manage your money
- Manage your investments in ISAs and pensions
- Give you a good grasp of how much you can spend and what you can afford
- Educate you and give you confidence in the plan so that you feel more in control and less stressed about money
- Help you find answers to some of those questions about when, where and how - from a financial perspective
- And possibly, be a person you can rely on to look after your dependents if the worst happens
This full service typically costs between about 1.5% and 2.5% a year including advice, administrations and investments.
Most financial advisers will have a free introductory session with you so you get a better sense of what they are like, how they operate and - really important - do you feel comfortable with them? Don't be afraid to ask all those silly questions and feel free to get a clear indicator in £ terms what the likely charges might be.
Our new Directory should help you to find an adviser you like the look of. You can read their answers to questions and get a feel for what they are like. We’ve created a profile for each where you can get a little slice of their personalities and experience.
We're in the very early stages of building out this service and it's small (but hopefully beautifully formed!?)
If you want more choice, here’s a link to Wayfinder which is a directory of accredited firms linked to the adviser trade body CISI.
Less pricey options
If you really could use some help or financial advice, tailored for you, and less about filling in forms online and more about speaking to a human being - but can't quite stomach higher or ongoing fees every year, there are a few cheaper options in town.
DIY investment platform Hargreaves Lansdown also employs 72 financial advisers who have a range of fixed-fee advice packages, starting from £495 for telephone advice or £1,495 for face-to-face advice. Their advisers will help you to meet your financial goals, save and invest for retirement and build or amend your portfolio depending on your aims and circumstances.
Robo adviser Nutmeg also offers a more traditional financial planning service - costs start from £575 where you can speak to a qualified financial adviser. You will get an in-depth review of your current financial situation and regulated investment, pension and tax planning advice.
Hatch does not offer regulated personalised financial advice, but offers up financial coaching to both individuals and employees. For £249 a year get answers to your questions, tips, ideas, challenges and help to chart a better path forward.
Consider talking to your boss about supporting this. If your firm sets up a scheme, employees can pay via salary sacrifice so the true cost is £144 or £169 per annum depending on your tax bracket. Paid over 12 months it works out as £12 or £14 net per month from the employees' pay. Or maybe you might persuade your boss to pay as an employee benefit??
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