7 life moments when you may need a financial adviser

There are big moments in life when a financial adviser can really help you out. We take a look at some of these key events and why it’s worth getting advice.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

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There are some occasions where using a financial adviser can really make sense. Although we all live different lives, some events are pretty common and apply to a lot of us. Sometimes, these moments can be stressful or time-consuming. So it can be useful to seek guidance from a professional to make life easier.

Michael Martin, private client manager at 7IM has identified seven key milestones where using a financial adviser can be really helpful. Let’s take a look.

1. Marriage or civil partnership

Although dealing with joint finances isn’t exactly romantic, it’s a really important step for couples. Newlyweds can definitely benefit from using a financial adviser.

This next adventure is going to create some changes to your tax situation.

As Michael explains, “One of the first things you might want to look at is tax-free allowances. Are you and your partner both using all your allowances for tax-free income, capital gains, savings and pension contributions, to name a few? Of course, tax treatments will depend on your individual circumstances and may change in the future – which is why it is so important to have someone who can guide you along the way. Seeking professional help to advise you on moving assets between partners could considerably reduce your combined tax bill each year and therefore be well worth it.”

2. Divorce

Life isn’t a fairy tale and not every marriage lasts. Divorces can be complicated and stressful to deal with.

The average age of divorcees has risen to the mid-40s. What this means is that couples getting a divorce are likely to have some joint assets. Because investments, estates, houses and pensions can be taken into consideration, some assistance to financially untangle yourself from your partner can be very beneficial.

Whether the situation is pleasant or unpleasant, it’s important that you both deal with the financial side of things properly. Otherwise, it could end up costing both parties.

3. Having children

If you do decide to have children, this means some added responsibility in your life. Although there is little as exciting as having children, you’ll have more on your plate. A financial adviser can help relieve some of the stress as you plan for their future.

Along with potentially forking out for future education, cars, or even a house, there are lots of less obvious saving opportunities.

As Michael explains, “Choosing between a Junior ISA and a Junior Self Invested Personal Pension can be difficult as each has its merits and pitfalls. A professional financial planner will be able to look at your individual circumstances and advise what’s best for you.”

4. Receiving a large sum or inheriting money

When receiving a large sum of money, it can be hard to know what to do. A large windfall or inheritance can really help to transform your finances. But only if you’re able to make the right decisions, which can be a lot of pressure.

A financial adviser will be able to give you some clarity and guidance.

“Having a large lump sum to invest could give you access to vehicles you’ve not been able to invest in before, such as enterprise investment schemes and venture capital trusts,” Michael explains. “These offer generous tax breaks to those prepared to take more risk.”

5. Retiring

Retirement can mean a really big change to both your life and your finances. Retirement planning is extremely worthwhile. It may be a change to have complete control over things instead of just receiving a salary. Direct control over everything is great but it can also be complicated.

A financial adviser can help you get all of your ducks in a row. They can help you plan the lifestyle you want and give you nice, easy directions on how to get there. This will allow you to make the most of any pensions and investments whilst carving out your dream life.

The last thing you may want to be doing when enjoying your retirement is regularly dealing with taxes, annuities and investment wrappers.

6. Passing on wealth

Inheritance Tax (IHT) can be a complex and significant issue. Arrangements are sometimes not made with enough time to spare. This process can be really stressful for your family to deal with.

Simply organising a will is only one step of proper estate planning, and a lack of preparation can be costly. As Michael explains, “Estate and tax planning can be complicated, and the rules change often, so it is well worth getting advice.”

7. Staying flexible

This is the wildcard. Life is going to throw you some curveballs. Who knows what’s around the corner? Having a clear plan can really help you, but no one has a crystal ball.

Unexpected events can happen and you may hit some milestones that are completely unique to you.

When this happens, seeking out some advice from a financial adviser can let you go with the flow. You can’t plan for everything, and it’s good to know you can get some support when you need it.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

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