Why your Financial Position Should be Regularly and Professionally Reviewed
Finance (Photo credit: Tax Credits)
Seeking professional advice is one those tasks for many that languishes towards the bottom of their to-do list. They know it’s important and needs to be done, but there always seems to be a more pressing issue. Often it is not until a client has something specific they wish to discuss that they’ll contact their financial adviser and arrange a meeting. The problem with this approach is that after several years without a review, clients very often lose track of their financial progress and are often surprised, or disappointed, when they learn how their position has progressed.
A big part of the reluctance many have is the misplaced perception that an individual’s financial situation cannot necessarily be improved. People assume that unless income increases in proportion to expenditure, then the status quo prevails; however, as any experienced financial adviser will tell you, there is far more that can be done. There is also the overriding worry that financial advisers are just out to make a buck and sell a product, regardless of whether it is really needed. This couldn’t be further from the truth when working with a chartered and accredited firm.
The longer you put off a review of your financial situation, the greater the effect on your finances. In much the same way as regular health checkups, small problems can be nipped in the bud if caught early, but the compounding effect of three, four or five years without a review can turn a small problem into a major obstacle.
A financial adviser’s role is not simply selling clients as many policies and services as they can. With reputation and word of mouth so crucial to financial advisers, they certainly wouldn’t be in business for long if this was their approach. On the contrary, a financial adviser will work with their clients to understand their needs, aspirations, tax and current financial position. They will then make informed recommendations about how to improve their client’s position, scouring the market for the most cost effective solutions. They should also cancel or amend any existing policies which could be working more effectively.
Perhaps most important to remember is that as the client, you are in complete control. No action can be taken without your express agreement. Finding a financial adviser you can trust to act on your best behalf is essential. Once you have found an experienced professional who can provide the regular, informed advice you need, along with regular reviews, the service you receive will provide excellent value for money and can help to safeguard your financial future.
Another important point to note is a recent change in the way financial advisers charge clients for their services. Until January 2013, financial advisers were commonly paid on a commission basis, receiving a small percentage of the value of a client’s investment. However, the FSA believed this approach to be too opaque; with many clients unsure how much they were paying for a particular service.
New rules dictate that financial advice fees should be based on a pre-agreed fee for a specific advice service, which ensures that the cost of financial advice is transparent. This makes it easier for customers to assess whether they are receiving value for money and to compare financial advisors based on their fees.
Author: Looking for a chartered financial adviser? Cardiff based Bartholomew Hawkins has an experienced team of specialist investment and pension advisers who can improve your financial position, conduct regular reviews and operate a clear, transparent fee structure.
Category: Financial Planning
