How to know when you should hire a financial adviser

If you’re looking to invest your savings, manage your finances or make long-term plans, your need for a financial adviser will depend on the type of investments you’re looking for, the complexities of your finances, and your personal circumstances and goals.

What does a financial adviser do?

A financial adviser will look at your financial circumstances, question you about what your long-term and short-term goals are, and how much risk you’re prepared to take with the money you want to invest. They’ll then recommend the investments that suit your needs.

There’s a wide range of financial advisory services available. A financial adviser can help you map out your goals in life and plan your investments and savings accordingly, from buying your first home to planning your retirement income. Some financial advisers will offer general financial planning, whereas others may specialise in a specific service, such as pensions. Independent financial advisers (IFAs) can offer you products from the whole of the market, whereas others may be restricted to the products their company offers.

Isn’t it cheaper to invest without advice?

It is, but you wouldn’t necessarily know whether your choices are the best for you. You have better protection if you use professional financial advice, should things go wrong, for example, if you’re given an unsuitable recommendation by your adviser. If your investments were non-advised, you will have nobody to blame but yourself for your choice. If you’re choosing a financial adviser, it’s important to check that they’re regulated. You can do this by searching the (FCA register).

In addition to protection against bad decisions, the expertise offered by your adviser is supported by specialist software for IFAs, which can search and recommend the best products based on your individual needs. This software for IFAs can monitor and track the performance of your finances, and even provide a portal for you to manage transactions and view reports.

Financial advisers have to be clear with you at the beginning about their fees and how they’re paid, so don’t be afraid to ask.

If you’re still not sure whether engaging a financial adviser is the right thing to do, it’s worth knowing that many advisers will offer a free initial consultation, to help you decide whether you’re ready to take the next step on your financial journey.