You can benefit enormously from the expertise of a good financial adviser, according to the new UK research. A study from Royal London shows savers who received professional advice between 2001 and 2007 were on average £40,000 (nearly N$700,000) better off than their unadvised peer by 2012 and 2014.
The study confirms the real return of expert financial advice over time. Nine out of ten people who received advice were satisfied with it. Even the group who only received a little bit of information were far better off than their unadvised peers.
You don’t know what you don’t know
When last did you check the stock market? Very few people worldwide have the knowledge and time to manage all their financial risks and a long-term investment strategy. In fact, most us don’t even know what our risks are, hence the need for expert advice. Part of a financial adviser’s job is to stay up to date with investment vehicles, insurance products, tax and retirement laws and economic trends. Even investment managers, who live this stuff, ask for financial advice. So when you get jittery about the falling dollar, downgrades or market ups and downs, a good adviser will see the bigger picture and diversify your savings to ride the storm. Using their knowledge, training and experience, they can compile a financial plan appropriate to your specific circumstances, needs and savings goals.
Save more and grow wealth
Good advice can turn financial dreams into reality. The research results show that people who take advice are likely to accumulate more financial and pension wealth, supported by increased savings and investing in equity assets, while those in retirement are likely to have more income, particularly at older ages. A financial adviser isn’t just there to hand you a financial plan and send you on your way. Financial advice is about improving the quality of your life through your financial choices. This is a continuous process as your financial goals will change over time. Using a financial adviser who delivers a financial plan, is transparent about their fees and reviews your portfolio at least once a year, will improve your finance. Your life is likely to change from year to year as new challenges and opportunities arise. A good adviser is a lifelong financial partner who helps you do the right things and perhaps more importantly, helps you to avoid making financial mistakes.
Take care of tomorrow
There’s a saying that goes, “the future belongs to those who prepare for it today”. Getting good financial advice is fundamental in preparing for the future. Making the right financial choices today will serve you, your family and even the next generation. Obtaining good advice means your future is taken care of. Not only through proper retirement planning, but should a setback strike, such as a disability or illness, you will have the financial provisions to mitigate its impact. Let’s say a 30-year-old professional with a young family is in a serious road accident on the way to work. He ends up disabled and can no longer work. Fortunately he has a disability cover, so he can afford medical care and still have funds available to pay for his children’s school fees. Now imagine the bleak picture if he did not have proper financial planning,
Worth the cost
Some misconceptions still exist about the real cost of upfront commission and commission or fees earned on an annual basis, especially given the image of all costs over the full lifetime of a financial product. This prevents people from getting good advice, as they could then gravitate towards self-help products or, even worse, decide against saving altogether. Contrary to popular belief however, financial advisers are pretty affordable, since the benefits of good advice should more than justify the costs. A good adviser will be transparent about costs, but it’s also your responsibility to make sure you understand how the fees are structured and what you’ll be paying at the outset.
It’s for you
Many people think they have too little money to require financial advice, but that is exactly why they do. Financial advice isn’t just relevant to those who are better off; it makes a real difference to the quality of life of people on all income levels, now and in retirement.
*Hilaria Graig is the marketing and communications manager at Sanlam Namibia.