Financial Advisers: Almost everything you need to know
What are financial advisers?
A financial adviser is a professional who is paid to offer financial advice to clients. Just as you may hire an electrician to sort out wiring for your home, you hire a financial advisor to create a plan for your finances. It’s all about paying someone for the expertise you need to reach specific financial goals.
Financial advisers may work for small firms right through to large organisations. They must be compliant with the Financial Conduct Authority (FCA). Financial advisers often create financial plans to support their clients in achieving their objectives. These plans include not only investments but also savings, budget, insurance, and tax strategies.
The services offered by financial advisers may vary. At In Partnership Financial Advisers, we offer truly independent, ‘whole-of-market’ advice, meaning you’ll receive the best possible tailored advice.
Our experts provide thoughtful and considered advice to meet client financial needs and help with financial planning. If you have a long-term financial goal in mind, our experts will use their expertise and knowledge to try and make it a reality. We believe in a very transparent and clear approach that ensures the client understands the journey, every step of the way.
Our team comes with a wealth of knowledge and are forever looking to enhance their skills within the industry. All advisers are highly motivated and enthusiastic to give you the best journey possible.
Why are financial advisers important?
In a world of economic uncertainties, intricate financial instruments, and evolving regulations, managing your finances can be a complex and overwhelming task. This is where the expertise of financial advisers comes into play. In the United Kingdom, financial advisers serve as invaluable partners in helping individuals and families make well-informed decisions that can shape their financial future.
Some of the ways financial advisers help clients include tailored financial planning, investment strategy and risk management. They may also support with retirement planning, estate planning and inheritance tax and more.
We’ve explored these services in our blog.
What to avoid when looking for financial advise
There are plenty of great financial advisers out there. However, there are also individuals who may offer poor financial advice in exchange for payment. Always look for a breakdown of prices when dealing with financial advisers. Trustworthy advisers will always remain transparent on price and what are you receiving for your fees. Similarly, some may try and hide behind financial jargon in order to hoodwink and misadvise clients.
As a client, you should never feel pushed or rushed in any financial decisions. Poor financial advisers may talk down to clients, leading them to feel inferior or out of their depth when it comes to making decisions on their finances.
About In Partnership Financial Advisers
We’re financial advisers based in Horsham, and are proud of our roots and largely word of mouth growth. Horsham is a market town on the upper reaches of the River Arun on the fringe of the Weald in West Sussex, England. However, we service clients across all of the UK.
We provide support to a variety of financial needs. Our advice will always come with impartial feedback and a bespoke approach for each client. We understand every client has different financial requirements and are all in different situations. Our advice matches the needs of each client on an entirely case-by-case basis. Once we understand our client and expectations, our advisers are then able to create a plan and provide pertinent advice.
Common financial planning mistakes
Financial freedom is an appealing concept for most people. However, in the quest for financial independence, there are inevitable pitfalls that often derail the journey. While financial planning is a crucial part of our lives, it is unfortunate that many people in the UK fall victim to some common financial mistakes that can be avoided with a little knowledge and foresight.
People often don’t take financial planning seriously enough until later in life; and the benefits of starting early and the compound interest as a result can be staggering, even for those on modest incomes. There are other common mistakes that crop up time and again when it comes to financial planning mistakes. These include ignoring inflation, not factoring in an emergency fund and being led by emotions over pragmatic and considered plans.
Dealing with financial stress
Financial stress is the anxiety, fear, and worry often experienced due to financial difficulties or uncertainties. It could be due to increasing debts, insufficient income, job loss, or unexpected expenses. The impacts of financial stress extend beyond your bank account, affecting relationships, job performance and overall well-being.
Financial stress, if left unchecked, can take a significant toll on your mental and physical health. In the UK, an increasing number of people are facing economic hardship, which can lead to anxiety, depression and other health issues. It’s therefore important to consider ways to reduce your financial stress.
A good place to start is to turn over all of the rocks and understand your financial situation. Create a budget that works to pay off debts where possible and increase your income and reduce your outgoings and regular payments where possible.
Passive income
Passive income refers to earnings that require minimal effort or active involvement once the initial setup is complete. Unlike traditional employment, where you exchange time for money, passive income allows you to generate revenue even while you're not actively working. While achieving true "set it and forget it" income might require substantial upfront effort, the potential benefits in the long run are undeniable. The nature of this post will focus on individual passive income and individual investing.
There are numerous ways to start earning passive income; here’s are seven that you can dive into at more depth through our guide.
Real Estate Investment
Dividend Stocks
Peer-to-Peer Lending
Create and Sell Online Content
Automated Online Businesses
Royalties from Intellectual Property
Invest in a Business
What is Consumer Duty?
The Consumer Duty, introduced by the Financial Conduct Authority (FCA) in the UK, is a set of guidelines aimed at ensuring financial firms provide a higher level of consumer protection. Here are the key points:
Firm Responsibility: Financial firms are required to act in the best interests of consumers, ensuring products and services are fair, provide value, and are understandable.
Product and Service Design: Firms must design and market products to meet the needs of consumers, avoiding the exploitation of vulnerabilities.
Clear Communication: Information provided to consumers should be clear, understandable, and not misleading, enabling informed decisions.
Customer Support: Firms are expected to provide good quality customer service, with efficient complaint handling and support.
Consumer Understanding: Firms should ensure consumers understand the products they are using and the risks involved.
Outcome-focused Approach: The Duty focuses on the outcomes experienced by consumers, holding firms accountable for the actual impact of their actions and products.
Vulnerable Consumers: Special attention is required for vulnerable consumers to ensure they are not disadvantaged.
Regular Reviews: Firms are expected to regularly review their products, services, and processes to ensure alignment with the Duty.
The Consumer Duty is a significant step towards creating a fairer, more transparent financial market, empowering consumers and holding firms accountable for their practices.
How to become a Financial Adviser?
Thinking of becoming a Financial Adviser in the UK? Here’s an introduction to starting your career, and you can also check out our full blog post.
Educational Background: A strong foundation in finance, economics, or a related field is beneficial. While a specific degree isn't mandatory, it can be advantageous.
Relevant Qualifications: Obtain a qualification recognised by the Financial Conduct Authority (FCA), such as the Diploma in Regulated Financial Planning offered by the Chartered Insurance Institute (CII) or the Diploma for Financial Advisers (DipFA) by the London Institute of Banking & Finance.
FCA Authorisation: To give professional advice, you must be authorised by the FCA. This typically involves being employed by an FCA-regulated firm or registering as an independent adviser.
Practical Experience: Gain experience through internships or work placements. Some start in related roles like paraplanning to build knowledge and skills.
Continuous Professional Development (CPD): Stay updated with the latest industry trends and regulations. CPD is mandatory for maintaining qualifications.
Specialisation: Consider specialising in areas like retirement planning, wealth management, or mortgages, which can enhance your marketability.
Soft Skills: Develop strong communication, analytical, and interpersonal skills. Building trust and understanding clients' needs are crucial.
Ethical Standards: Uphold high ethical standards, as financial advisers must act in their clients' best interests.
The journey to becoming a financial adviser involves both formal education and practical, real-world experience.
How Financial Advisers can help when applying for a mortgage
Financial advisers play a crucial role in guiding individuals through the often complex process of applying for a mortgage. Here's a summary of how they can assist:
Assessment of Financial Health: They begin by evaluating your financial situation, including income, debts, savings, and credit score, to determine your affordability and the most suitable mortgage options.
Advice on Mortgage Types: Financial advisers explain the various types of mortgages available, such as fixed-rate, adjustable-rate, interest-only, and others, helping you understand their implications and choose the one that aligns with your long-term financial goals.
Finding Competitive Rates: They can help you navigate the market to find competitive mortgage rates, potentially saving you a significant amount of money over the term of the loan.
Application Process Guidance: Advisers guide you through the application process, ensuring you have all the necessary documentation and understand the terms and conditions of the mortgage agreement.
Budget Planning: They assist in budget planning, helping you understand the impact of the mortgage on your future finances, including monthly repayments, associated costs (like stamp duty, valuation fees, etc.), and how changes in interest rates might affect you.
Insurance and Protection Advice: Financial advisers can also recommend suitable insurance products, such as life insurance or mortgage protection insurance, to safeguard your home in unforeseen circumstances.
Long-term Financial Planning: Beyond the mortgage, they can help integrate your home purchase into your broader financial plan, considering aspects like investments, retirement planning, and estate planning.
In summary, financial advisers offer tailored advice and practical support, making the mortgage application process more manageable and aligning it with your overall financial objectives. Their expertise can be particularly valuable for first-time buyers or those with complex financial situations. Want to find out more? Check out our full blog post here.