Independent financial advice: Is it really affordable?

There are many common misconceptions when it comes to independent financial advice. One is that you only need it if you are wealthy. Another is that you can only afford it if you are wealthy. 

Such views are understandable. Independent financial advice has not always been easily accessible to the entire UK population. Indeed, with numerous industry spokespeople regularly stating that financial advice is ‘too expensive’, it is little wonder so many Britons assume they cannot afford to pursue this option. 

However, the misconception that independent advice is the reserve of the well-off could prove dangerous for many savers. After all, throughout the cost-of-living crisis, many individuals approaching retirement will have been feeling anxious about their financial futures – soaring inflation and energy prices are counteracting any potential benefits they might have enjoyed with rising interest rates. 

So, independent financial advice will be vital in helping individuals develop a sustainable strategy to help them achieve their desired retirement outcome, without hindering their existing circumstances. 

My Pension Expert is keen to break down the myths surrounding independent financial advice and prove once and for all that it is, in fact, affordable.

How much does it really cost? 

First, we must address the elephant in the room and acknowledge that independent financial advisers (IFAs) do charge clients for their services. 

These charges will be based on several factors, including the extent of the advice required, how much time it will take to achieve the financial goal, as well as the size of the assets involved (for instance, a pension pot). Advisers usually charge between 1 and 2% of the asset in question. 

It should also be noted that lower percentage charges are assigned to larger assets, while smaller assets receive a higher percentage charge. 

IFAs can also charge ongoing adviser fees to clients who decide to hire the adviser for a longer period of time. Again, these charges can vary from adviser to adviser, but fees tend to range from 0.25 to 1%. 

These fees should always be clearly communicated to the client before entering into any transaction; this ensures transparency and prevents nasty shocks further down the line. 

At My Pension Expert, we do things a little differently. We provide our prospective clients with a full consultation with our teams of paraplanners and advisers – the client is then presented with all the recommendations and it is only if the client decides to follow the advice, they receive a charge. We believe that this ensures an extra level of transparency and builds client-adviser trust. 

For some, these charges might appear costly. However, the true value of advice lies within the benefits it can offer clients when it comes to their future retirement outcomes. 

The value of advice

As opposed to free guidance, independent financial advice is personalised to each client. The recommendations they receive are tailored to their specific needs and goals – and therein lies the true value of advice. 

Indeed, at My Pension Expert, our team of advisers conduct a thorough audit of a client’s financial circumstances, their risk appetite, and their desired retirement outcome. From this, we develop a tailored retirement outcome to suit their needs. 

As you would expect, there is no one-size-fits-all approach to retirement. So, every strategy will involve different factors; from higher-risk investments to flexible drawdowns or a fixed-term annuity. In taking on this tailored advice, an individual is able to make their money work in the most efficient way to achieve their particular goals, all without hindering their existing financial circumstances. 

Independent financial advice can be hugely valuable when it comes to developing a sustainable financial strategy. And while there are charges involved, the long-term financial value it can offer to clients certainly outweighs charges. 

So, if you are interested in hearing how My Pension Expert can help you to achieve your desired retirement outcome, request a call-back from our team today!