Is financial advice worth the money?

Recent research shows that most people don’t know whether financial advice is worth the money. We take a look at the facts behind the figures.

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Recent research suggests that most people don’t know whether financial advice is worth the money. A survey conducted by Opinium for Hargreaves Lansdown shows that most of the 2,000 respondents guessed they would need to invest around £117,000 to make it worth paying for advice.

“It helps explain why so many people who could benefit from advice are reluctant to take it,” says Sarah Coles, personal finance analyst for Hargreaves Lansdown.

Is financial advice worth it?

For many people, the answer doesn’t seem to be clear. In fact, the survey found that 46% of people aren’t sure when to ask for help.

When it comes to financial advice, 22% would rather turn to their parents than hire a financial adviser. Another 15% would instead talk to a partner.

Is there a right time to search for professional help?

There’s no hard and fast rule about when you should get advice, according to Coles. She explains, “People tend to turn to advisers when things get too complicated, when the amount of money at stake means they’re worried about making a mistake, or when they just don’t have the time or inclination to do things themselves.”

According to Investopedia, it makes sense to seek financial advice any time that there’s a major financial change in your life. This could include getting married, going through a divorce, or having children. It makes sense to seek advice as you near retirement and want to make sure you’re financially ready to take that step.

Coles says seeking financial advice is a good move if you inherit money. It’s also useful if you simply want a mid-life check-up to make sure you’re on the right track.

What fees should I expect for financial advice?

Some financial advisers charge a percentage of your assets as their fee. Others charge by the hour or have set fees based on the estimated amount of work. 

“There’s no specific typical fee, but as a rough rule of thumb, you can expect to pay around £500-£2,500 for assets of up to around £100,000,” according to Coles. If your investment portfolio is very complex, you could be looking at a fee of £5,000 or more.

Before you hire somebody to help you, make sure you understand what you’re paying for. Are you looking for one-off advice? Or do you want to establish something ongoing where you can consult on all of your financial decisions?

Coles points out, “A good adviser will also be up-front with you if they think it’s not worth you paying for advice at any stage”.

Do I really need a financial advisor or should I do It myself?

There’s nothing wrong with taking care of your finances on your own, as long as you have the time and skills to handle it, according to Forbes. For people with busy lives, there might not be time left to learn all they need to know about finances.

Making financial decisions can sometimes feel overwhelming or confusing. For those people, having an advisor can make a world of difference.

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 assessed. Consider taking independent financial advice.

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