Financial advice is important

Your money, savings and pensions are very important to you and If you want to make the most of these valuable assets you should take financial advice. You may be tempted to make your decisions or self-select your investments but do you really have the knowledge and skill to get the best results?

I think it is simply too difficult for most people to make the right decisions without first speaking to an expert. A good financial adviser will:

• Help you understand the key issues and set your financial objectives
• Explain the many different options and work out the best solution for you
• Help you make the right decisions and ensure you understand all the potential risks.
• Reduce the amount of tax you will have to pay

There are many different types of experts including: pension companies, Pension Wise and financial advisers, but for those who are serious about making the right decisions there is no substitute for advice from a qualified and experienced financial adviser.

Why you need financial advice

The new pension freedoms put you in control of your pension pot and you can now take income or cash in any way you wish (after paying the appropriate tax) and at any time after the age of 55. However freedom comes with responsibility and you owe it to yourself and your family to get the best possible help and information before you make a very important financial decision.

There are many reasons why you should take financial advice including:

• Most people are not good at making financial decisions
• There is a lot at stake - your financial security could be at risk
• It’s more complex that it seems - it is easy to make mistakes

The value of financial advice

My clients value and appreciate the advice I give and understand that I must charge a reasonable fee for the work I do. This begs the question “What is a reasonable fee that enables my form to be profitable while at the same time providing good value for my clients”?

The key to this question is to understand the difference between cost, price and value:

• Cost – this is how much is spent on fixed and variable costs to provide the advice
• Price – this is the fee for advice charged to the client
• Value – the monetary benefit and importance of peace of mind and security

The key element in the pricing equation is the value I can add to your financial circumstances and future retirement income.

Added value

Whereas cost and price are measured in purely monetary terms, value is measured in both monetary and subjective terms.

In monetary terms, advice may result in the best priced annuity or competitively priced SIPP. The value of advice also can be measured by working out the added value from superior investment solutions or additional income.

It may be harder to value advice in subjective terms but for many people this can be more important. For instance, good advice will give you provide peace of mind and security, and this is something you cannot put a price on.

Read our guide - Retirement advice; an art or a science