The value of advice

NOTE: This post is more than 12 months old, and the information contained within may no longer be accurate.

I have recently been meeting with a raft of new clients who have been referred to Wingate from several different sources. One thing that the majority of them have in common is that they are interested in what “extra value” having a financial adviser can add over simply “going it alone” and doing things themselves.

When posed these question I ask my clients to consider the following;

Firstly the impact of advice is not simply financial. Whether taking advice as a one off or throughout your life time there are often emotional benefits to having professional advice. Research carried out for the Financial Conduct Authority (FCA) by NMG Consulting in 2017 found that “active participants who choose to employ a financial adviser receive the emotional benefit of peace of mind that they are doing the best they can to meet their financial objectives”.  Peace of mind cannot be quantified necessarily however responses were focused more on the level of reassurance that comes with advice, that mistakes or poor decisions are being avoided and that overall hassle is being reduced. Building a financial plan for the future can be the first step of gaining this valuable peace of mind.

Secondly, research shows that clients are financially better off after receiving advice. ILC-UK conducted research, released in 2017, that showed clients who received financial advice between 2001 & 2007 accumulated 20% more in assets and held approximately £41,000 in additional financial and pension asset by 2012-14, over those who did not receive advice during that period. I believe a very small part of Financial Planning is just “picking the right investments”. In fact, the majority of our work revolves around building a viable long term financial plan. This will involve making use of important allowances, mitigating tax issues, keeping pace with regular legislation changes, assessing your objectives and then building a robust strategy to help achieve your goals. The selection of a suitable investment only follows once all of the above work has been complete.

Lastly, the value of advice, from a cost perspective, is relative to the value of the assets that you are managing. For example, I sometimes ask clients to consider the work that goes into servicing and maintaining their car or cars. There will be an annual MOT (legal requirement), annual service and potential repairs throughout the year if something goes wrong or changes. When added together these costs, as a percentage of the value of the car, can be more than the cost of financial advice on an asset that normally decreases in value over time. The difference to consider is that the value or importance of your car will pale in comparison to the value and the importance of your pension fund for example. Most of my clients wouldn’t consider completing their own annual service on the car by themselves, so why do the same thing with your long term financial future?

Ultimately it is up to the individual to make their own decision when weighing up the value of qualified financial advice. The majority of the clients that engage with our services at Wingate have experienced both the emotional and financial benefits of building a long term relationship with a qualified financial adviser. If you are considering taking your first steps towards financial advice or would simply like to ask a few more questions regarding our services, please contact me directly and I would be happy to arrange a no-obligation meeting to see how I could add value to your financial plan.


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26 Apr 2024

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