The Value of Advice: Why Miss Out? 

In one way or another, everyone seeks advice. Whether it’s a decision regarding which hotel to stay at on holiday, or even which jumper best suits you, we all understand the benefits of seeking advice from a third party. 

Having an external view of a situation can offer useful insight into your unique situation. It can also open your eyes to new avenues or opportunities that you might have otherwise overlooked. 

This view is hardly revolutionary. Most people understand the value of advice in most aspects of their lives. Yet, there remains one area of day-to-day life, where its importance is often overlooked: our future finances. 

Indeed, My Pension Expert’s own research found that just 23% of Britons currently use the services of a financial adviser. 

But why is this the case?

Where’s the value?

Arguably, the onus for the lack of people seeking advice lies within the financial services sector – historically, the industry has not been the best at communicating with Britons. 

Despite many organisations offering regulated independent financial advice, there is not much information regarding the actual value advice can offer savers, both presently as well as the short- and long-term. Instead, organisations have tended to assume that the value they offer is just implied. 

The fact that an adviser is qualified and regulated by the Financial Conduct Authority (FCA), and shares documents regarding investment or pension fund performance is not enough. These factors do nothing to actually demonstrate how advisers can positively contribute to someone’s financial strategy. 

It is little wonder, therefore, that people feel more inclined to seek free, unregulated guidance instead. As it is free, and still provides clear information about a range of financial products, people would be forgiven for considering it to be a better option. 

Our profession needs to be better and communicate. It’s that simple. And in doing so, we can seek to provide true value to people’s financial experiences.

Demonstrating our value

It’s all well and good to tell people that financial advice can offer value. But what value does it actually provide? 

Firstly, advice is completely personalised to one individual. No two financial strategies – be it for long-term investments or a pension plan – are the same. Advisers will not only assess your financial situation but also your life goals to better understand YOU. For example, when you decide to retire, will you want to go abroad on holiday once a year? What do you value most about your free time? An adviser will take all this into account and develop a tailored strategy to help you achieve the lifestyle you want. 

Secondly, an adviser could expose you to new financial avenues that you may not have considered before. Of course, people can conduct their own research when it comes to different financial products. But more often than not, the research will just result in strong foundational knowledge about a range of products. Whilst useful, it will not result in a financial strategy that is suited to their personal needs. Nor is the research likely to explore the wider range of products that savers might not be aware of. 

Advisers will do just that and present their clients with the various different options which will help them to achieve their financial objectives. Exploring different investment options, for example, such as passive funds or higher-risk investment portfolios, could enable people to make their money work harder than they thought possible. 

Of course, it should be noted that with any investment products, people’s money will be exposed to risk, and there is no guarantee that a fund will perform well. But again, therein lies the value of advice, as an adviser will also consider how much risk you are comfortable with and capable of taking, and make the appropriate recommendation. You can rest assured that they will do everything in their power to develop a retirement strategy, with your best interests at its core. 

Ongoing value

People’s circumstances can and will change over time. And a financial product selected at one point in time may become less suitable later down the time. This could be for a variety of reasons from external economic factors to unexpectedly larger expenditures. 

But this should not be a reason to panic. After all, advisers are here to help savers deal with this very issue. They will be able to assess any changes and recommend potential changes to original financial plans which are tailored to changes in circumstances. 

This means that advisers can help people remain on track to achieving their financial goals, in a way that suits their needs. 

Whilst advice isn’t free, the value it can offer people is exponential. From developing an initial strategy to assisting with changes later down the line, advisers will always seek to place their clients in the best possible position. 

Advice does come with a fee, however, the value it can offer someone’s strategy arguably makes it worthwhile. After all, in the long term, financial advice could take you that extra step closer to helping you achieve your future goals, be it that dream holiday, or getting that extension to your house you always wanted. 

And of course, if you’re curious about how financial advice could help you improve your financial future, get in touch today and speak to a member of our friendly team at My Pension Expert!