Who needs financial advice?

It is a common misconception that financial advice is just for the uber rich. This isn’t necessarily the case with individuals accruing significant savings and pension pots during their working life as well as the increase in property price and other capital gains.

Millennials are also set to inherit more than any other generation in what has been dubbed as “The Great Wealth Transfer”. Data from HMRC released on 28th July 2022 showed that Inheritance tax (IHT) receipts were £6.1bn during the financial year 2021-22, the highest level on record.

When might you need financial advice?
  • If you have inherited money
  • If you are selling a significant asset
  • Are planning for your children’s future
  • You have specific lifestyle goals
  • Planning to pass money on
  • Are going through a divorce
  • If a loved one has passed away
  • If you are thinking about investing your pension
  • Are considering consolidating multiple pension pots
  • If you want to retire early
What are the benefits?

Financial advice can help you achieve your financial goals by providing expert opinion and planning and ensuring you are focussed on your goals and objectives. Many people are too busy with the day to day to find time to plan and research all available options. Benefits include:

  • Confidence – Expertise and qualifications, regulated advice, can make the complex easier to understand.
  • Tax planning – Make the most of tax allowances and make sure you don’t pay more tax than you need to.
  • Pensions – Can be difficult to understand. Need to regularly monitor, assess risk and ensure you are saving enough for retirement.
  • Estate planning – As well as setting up a Will you need to prepare for the transfer of wealth in the most effective way i.e. trusts, gifting and other IHT planning.
  • Investments – Can assess risk and undertake due diligence, ensure you have diversification, portfolio management and regular rebalancing. Advisers also have access to cost effective portfolios not available to you directly.
  • Protection/Life Insurance – Take the time to find the best and most fit-for-purpose cover for both individuals and corporate entities.
  • Cash flow planning – Financial health check to ensure you have enough money to last your lifetime. What age can you afford to retire and the effects of any life events.

Independent Financial Adviser, Dafydd Parry says, “Whilst the worth and cost of financial advice is difficult to quantify, the value of advice from a trusted adviser can, and often does, provide benefits beyond monetary gain, such reassurance, confidence in achieving your long-term goals and time saving”.

How much does it cost?

The exact amount that advisers charge depends on what kind of help you need. An adviser’s fees will be based on a number of things – the extent of the advice you need, how much time it will take, and the size of the assets involved. Broadly, advisers often charge between 1-3% of the asset in question (e.g. a pension pot). Every adviser is different, but all should be happy to discuss their fees upfront.

Types of fees:

  1. Fixed fee – a set price agreed in advance for specific work
  2. Percentage of assets – percentage fee charged based on the assets the adviser manages for you
  3. Hourly rate – fees paid depend on the time spent on specific work the adviser is doing for you

Costs may also vary nationally – but good advice should provide more value than no advice at all.

You should discuss fees and methods of paying in your first meeting with a financial adviser, so you know exactly how your relationship will work. Many advisers will offer a free initial consultation.

Will I be better off after financial advice?

A report by the International Longevity Centre (ILC)think-tank found that those who have sought professional financial advice are better off by an average of £47,000 over a decade compared to those who did not take advice. [1]

Research carried out by Unbiased also highlights the boost to pension pots that professional advice can bring. They state that those taking advice will save an average of £98 per month more, which equates to an additional £3,654 per annum in retirement income, based upon a pension pot of £100,000. [2]

Other analysis [3] shows five areas of financial advice that could each be worth over £14,000 over a ten-year period, for a client with £150,000 invested:

  • Avoiding the behaviour gap (the difference between real investor returns and average investment returns due to making emotional decisions): £2,800 a year
  • Tax savings: £1,770 a year
  • Avoiding sequence losses (negative portfolio returns very late in your working life and/or early in retirement): £2,700 a year over 20 years
  • Returns over inflation (a rise in prices which reduces purchasing power): £2,970 a year
  • Lower investment costs: £1,455 a year
Alternatives to an Independent Financial Adviser (IFA)

Free websites and advice services can provide impartial financial guidance, these include Citizens Advice Bureau or MoneyHelper. Guidance will give you information to help you narrow down your choices.

Robo-advisers such as online investment platforms, assess your attitude to risk and use algorithms to make recommendations, usually a portfolio of funds. Whilst usually cheaper than an IFA, they do not offer face-to-face advice, so you need to be happy to manage your finances through an app.

Becky Williams, Chartered Financial Planner, says “Anything that helps to promote awareness of sound financial planning is to be welcomed. However, apps, no matter how sophisticated, can never really replace the human connection and understanding of an individual’s nuances. When I’m advising clients, I’m picking up on multiple signals as to what the client needs and wants, tick boxes in an app simply can’t do that.”

How do you find a good IFA?

There are several ways to find an adviser, including:

  • Asking family and friends for a recommendation
  • If you have other professional advisers e.g. an accountant, ask who they would recommend
  • Use the internet to search for local advisers
  • Search a dedicated financial adviser website such as Unbiased

It is usually worth speaking to two or three financial advisers to compare their services and prices before you commit to a meeting.

What to check:

  • Are they are authorised and regulated, e.g. by the Financial Conduct Authority (FCA)?
  • Understand how much and how you will be charged.
  • How experienced is the individual you will be dealing with?
  • Look at independent reviews such as Trustpilot.
  • Are they responsive and easy to get hold of?
  • Do they use easy to understand language and not jargon?

To discuss any of the issues raised in this article, please contact us


  1. https://ilcuk.org.uk/financial-advice-provides-47k-wealth-uplift-in-decade/
  2. https://www.unbiased.co.uk/life/get-smart/cost-of-advice
  3. TCF Investment https://www.tcfinvestment.com

Personal circumstances differ and not all of this information is applicable to every client and/or their business, this information is general in nature and should not be relied upon without seeking specific professional financial advice.

The Financial Conduct Authority (FCA) does not regulate tax advice, estate planning, trusts or will writing.

The content in this article is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice.

Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles.

Thresholds, percentage rates and tax legislation may change in subsequent finance acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results.

Pareto Financial Planning Limited is authorised and regulated by the Financial Conduct Authority (FCA).