|As someone who has spent 50 years working as a financial adviser and financial planner you would probably expect me to say ‘Yes’ to this question.
But not everyone needs to use a financial adviser in every circumstance. By the way I am using the term ‘financial adviser’ to encompass both financial advisers and financial planners for simplicity.
According to research carried out in 2019 by NextWealth and the Personal Finance Society (PFS) the average cost to onboard a client is £1,543. So if you only have £30,000 to invest you could be losing 5% straight away which makes little sense.
What if you are investing monthly?
Bearing in mind the cost that the adviser firm has to cover to take you on as a client this is particularly a problem for you if you want to invest monthly or contribute to a pension monthly.
Prior to 2012 financial advisers would receive a commission from a product provider for setting up an investment or pension. This practice was ended as it could lead to an adviser choosing a plan from a provider which offered a higher commission rather than one that was most suitable for you. Whilst the better advisers always put the needs of their clients first, regulators have to set conditions which protect clients from ones which do not.
What if you just need life or health insurance?
If you just need life insurance or health insurance you might be in luck as financial advisers can still receive commission on these products whilst at the same time sourcing the most suitable plan for you.
Are you in the ‘advice gap’?
The cost of providing good quality advice which the government has brought about for good reasons has inadvertently created what is referred to as the ‘advice gap’.
This is the number of people who are not taking financial advice. Depending on the research you look at the advice gap could represent almost 90% of the UK population. Whatever the figure actually is, it is just not possible for most of the working population to use the services of a financial adviser.
This is getting interesting, tell me more
If you want to read more on this topic please go to my website at Do I really need to use a financial adviser?
If you can’t use a financial adviser there are ways that you can get very helpful guidance without actually receiving personal advice and the above link will show you some of these. It will also deal with the topic of whether financial advisers add value.