When you need a financial adviser and when you don’t – Episode 4 – Grow It

3 min Read Published: 15 Mar 2023

In the last video in this series I discussed risk and return as well as discerning your attitude to risk. In this video I want to talk about when you need to take financial advice and when you don’t. A financial adviser can provide advice on a wide range of products and services including insurance, mortgages, retirement planning, tax and savings and investments. In this video I am just going to focus on investment advice.

When you need a financial adviser and when you don’t

So perhaps the easiest way to start is to ask yourself a number of questions.

Do you have the time, knowledge and inclination to manage your own investments? Are comfortable with taking responsibility for the outcomes of any decision you make, good or bad? Do you have the time and knowledge to regularly review and manage your investments and make sure that they are aligned with your financial goals.

If your answer is no to these questions then seeking financial advice may be the best option for you. A financial adviser can look at your wider financial circumstances, your financial goals and your appetite for risk. They can then make a formal investment recommendation plus you get greater consumer protection should things go wrong. Financial advice can be particularly valuable in scenarios such as when you are approaching retirement and looking to draw on your investments and pensions or if you are looking to buy a property (in this case mortgage advice can make the difference between securing your dream home or not).

Of course such financial advice comes at a cost. Advisory comparison website VouchedFor compiled a Cost of Advice report and found that while most financial advisers will offer a free initial consultation the initial fees they charge typically range from 0.5% to 5% of investable assets with an average of 1.74%. Ongoing charges range from 0 to 2% of your investments every year. The average ongoing fee is around 0.79%. This soon mounts up.

That’s why it is important to ensure that you are getting value for money and whether you need the help of a financial adviser. In the notes of this video I have linked to an article on the MTTM website that looks at the cost of advice, when you should seek it and the different types of advice in more detail. It also explains how to find a financial adviser you can trust if you don’t already know one.

However, f you finances are in order and are pretty straightforward, you have money set aside for emergencies, if you are employed you are contributing to your company pension scheme and you have spare money to invest and a timeframe of at least 5 years then there are services out there online services out there that not only recommend a diversified portfolio for you but also manage it, at a fraction of the cost. These services are often referred to as robo-advisers. They are cost-effective and in some instances mean that investors can invest from as little as £1 with the hard work done for them. For many consumers this will be sufficient to meet their needs, which is why these online services have proven extremely popular.

At the other end of the spectrum, if you are confident in making your own investment decisions and managing your own money and happy to carry out your own research then it is possible to use an investment platform to manage everything yourself, without seeking financial advice or guidance from a third party. Investment platforms include companies such as Fidelity, Hargreaves Lansdown and Interactive Investor. While they will offer a similar range of investment options such as fund and shares there are nuances and we review all of them on our youtube channel and on the Money to the Masses website. I also link through to our best buy table in the notes below this video which gives you an overview of the platforms out there as well as links to our in depth reviews.

In the next video I am going to explain further the easy options for beginner investors to get started as well as look at your options in terms of whether you invest via an ISA, pension or general investment account.

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Please remember, with investing your capital is at risk and the value of investments can go down as well as up, so you may get back less than you invest. Wealthify is authorised and regulated by the Financial Conduct Authority.

Fidelity - For more information about Fidelity, please visit www.fidelity.co.uk/moneytothemasses. Please remember, the value of investments can go down as well as up, so you may get back less than you invest.