Over the years, cinema has brought us many iconic frenemy battles, from Maverick and Iceman to Rocky and Apollo to the new and upcoming Deadpool and Wolverine duo.
The same can be send from most industries. And for the retirement sector – although not as much of a spectacle as a clash of cinematic titans – our minds jump to the supposed rivalry between advice and guidance!
Advice and guidance are two aspects imperative in retirement planning for upcoming retirees. And whilst both have different qualities, they ultimately go hand in hand as necessary tools for building a retirement strategy.
Guidance – an early helping hand
Imagine this – you pay into a pension scheme at when you begin working, and think little of it for the rest of your career as your pot gradually builds up. Then, after a number of years, all this money becomes available, and you know you need to do something with it, but you’re not sure what. Enter guidance!
Guidance comes in handy for the first steps in exploring your pension options. With the era of technology, basic pension questions can be answered in a matter of minutes via a quick Google search. It’s also usually a free service; internet resources such as PensionWise, MoneyHelper and AgeUK offer valuable guidance on workplace pensions, state pensions and more, all at no cost.
When speaking directly with firms that offer guidance and not advice, you’ll usually be made aware via statements such as “We cannot advise you…” or the emphasis that any decisions you make are down to you alone. Those offering guidance essentially provide you with clear, unbiased facts about different options that might work for you. It is up to you how to use this information for future decisions.
Finally, a key point to note is that guidance is usually free of charge. This is a positive in ensuring that information is accessible to everyone. That said, it should be viewed as the initial step into retirement planning, as opposed to the only action someone can take if they don’t want to pay.
So, with this in mind, how does guidance compare with advice?
Advice – An extra boost
Although valuable, guidance has extreme limitations in providing answers as what your best retirement options are. It can certainly give you an overview of drawdowns and annuities, but there are no tailored recommendations as to why they may or may not suit your needs or help you to achieve your future objectives.
Independent financial advisers, like our team at My Pension Expert, take into account an individual’s financial circumstances and goals. With a dedicated adviser appointed to each client, the advice offered is FCA-regulated, meaning that the actions taken are protected and in the best interest of the consumer.
Taking advice will mean paying a charge, which may be off putting for some. However it’s important to understand the value advice can offer, both within a one-off appointment, or as an ongoing service. For example, My Pension Expert offers ongoing support to ensure our clients remain on track with their retirement objectives, even if their circumstances change.
And therein lies the value of advice – ongoing tailored support to ensure you remain on track to achieve the financial future YOU want.
A pair in alliance
Advice and guidance were both curated for the aim of providing assistance for those looking deeper into their finances. Much like the frenemies in most films, they eventually intertwine and work together for the best – the best in this case a retirement suited to the client’s needs. Guidance itself works in the favour of advice due to the fact it highlights how much more information is required and whether the enquirer needs the help of an adviser to design a plan catered to them.
And of course, we believe that before making any major financial decision, it is important to gather enough information, and make sure you’re making the right decision for you and your future. After all, why shouldn’t you make use of all the tools at your disposal that will allow you to enjoy your well-earned retirement.