The value of planning

The value of planning

Financial advice can be thought of as a one-off event, such as when retiring, thinking about investing a lump sum or managing one’s estate for Inheritance Tax. However, the real value can be sought from engaging a financial planner to help you and your family plan your future and be with you every step of the way to check that your plan is on track.

Many of us bumble along through life, saving along the way because that is what we feel we ought to do. However, what we really need to understand is what direction we want our lives to go in and what are we actually saving for? Children’s university, major holiday, retirement, or something else? What does your retirement look like? These are all the kinds of conversations a financial planner will have with you from outset. They can really help you to build a picture of your future and talk about how you can make it happen.

It is not easy to quantify the benefit of having a financial adviser and most think of an adviser’s value in terms how much extra investment return they can generate. The true value of a financial adviser cannot be measured in investment return alone, but rather their ability to provide a comprehensive financial service meeting a variety of needs.

A 2019 study by fund management company, Vanguard, concluded the single factor providing the greatest value added by advisers is behavioural coaching.

Behavioural coaching can encompass matters such as really helping a client to understand and manage their expenditure. Crucially it might entail helping to educate an investor about an investment strategy and the reassurance to adhere to the strategy when the markets decline, of particular interest in the recent COVID climate.

Finally, I also believe that a financial adviser can help you stop making mistakes that could be costly. This might be ending up with the wrong investment solution for your needs or it may be falling foul of any tax traps that may exist in your plans. Whilst these do not contribute to greater returns, they may stop you losing money.

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