Retirement- Why Should I Hire A Financial Adviser?

When thinking of retirement, there are many options you could have when trying to secure your future. You’ll be concerned about savings and pensions more than ever. Making these decisions alone is quite difficult. You would greatly seek advice from many quarters. One of the crucial people to consult is a financial adviser. This is because making long-term decisions such as retirement can be cumbersome and frightful.

Financial advisers can assist greatly in this regard by offering good and timely advice especially now that you’re considering retirement. But, even before you start seeking the services of a financial adviser, which are not free, look for other free avenues first. One of the most renowned pension guidance service is Pension Wise. It’s a government-owned service which is absolutely free. One of the services it offers is guiding you on how to use and utilize pension pots. They will also go further to disclose all options available to you, paying special attention to your financial ability, capability, and position. In fact, you could also use the Pension Wise service to understand your own individual financial position. If you’re also considering to consult a financial adviser, later on, the Pension Wise service could guide on what to expect, what to ask the financial adviser and any other aspect of importance to the interaction with the financial adviser.

Photo Credit: shoptlaq.com

Photo Credit: shoptlaq.com

Generally, most people are part of a pension scheme or a pension pot as a measure of securing their retirement. The pension scheme could be paying you income that’s based on your salary. In addition, the savings in the pension scheme could be providing you with a certain sum of money; this is what is referred to as your pension pot. The duration in which you will use either avenue as a means of retirement income will solely be in your own prerogative.

One of the key considerations is getting to know if you’re in the right financial position to retire. This should be done before choosing any pension scheme or retirement plan. A financial adviser through a ‘fact find’ will assess your financial position and viability with regard to any retirement plan, pension scheme, and pension pot.

Another thing a financial adviser would do is to acquaint you with the past and current rules that govern access to pensions. It was usual in the past for people to buy annuities once they took tax-free money out of their pension pots. It was actually a requirement that if you withdrew this cash, you had to utilize it in a manner that would guarantee you consistent income for a duration which most of the time was for the rest of your life.

Ideally, it’s wise to hire a financial adviser when you would want to expose yourself to the least risk possible. Financial advisers are professionals who have been exposed to various financial ideals, situations, and risks. You could benefit a great deal from their exposure and the broad range of choices and alternatives that they may present to you. In contrast, when you decide to embark on an investment alone, the effects could be detrimental owing to the limited choices you have or can think of. You might not even be conversant with financial ideals hence you are exposing yourself to great risk and less choice. Therefore, for the sheer fact that financial advisers are experts and are duly qualified in the field, you should hedge your bets on them.

The advice you can get from a financial adviser could vary in form and type. It’s important that you understand the type of service you’ll get due to this variation. With regard to retirement and retirement products, personalised advice could be of great benefit to you. The financial adviser would take you through the ‘fact find’ aforementioned in order to get a clear picture of your individual financial position. This would be followed by presenting the retirement products available in the market and proposing you take the one that is most suited to your financial needs and position. You must take into cognizance that personalized service is paid for. It might be a little more, a little less depending on the complexity of work, but what you’re assured of is getting an equal service for equal pay.

As normal practice dictates, the financial adviser will discuss with you beforehand the finer details regarding costs and fees. In these discussions, consider taking advantage of this opportunity to negotiate price and even get a good bargain. Another important thing is that about cost is that aside from the adviser’s fees, there are other separate costs. For example, when you decide to enter into a pension scheme, there are certain fees that you will have to pay in order to enter the scheme. You should be aware of these costs too.

There’s another option of buying retirement products directly without seeking any advice from any quarter. Well, do this if you’re well-versed in financial ideals and financial products; or if you’re a financial adviser yourself. It could actually save you money. Otherwise, if you’re not well-versed in this, the effects could be detrimental. You could lose your investment, or it may actually turn out to be expensive, when you realize your mistake then you decide to hire an adviser later. That’s why I’m of the idea that you should consider hiring a financial adviser in the first place.

In some cases, there are instances you might receive wrong advice and lose your money even after the financial adviser told you to follow a certain course of action. In this cases, you always have the option of legal recourse. You can file a complaint to the financial adviser or the firm that he/she works for. If this doesn’t work, or an unfavourable action is taken, you can turn to the office of the Financial Ombudsman.

You should hire a financial adviser if you want to get all facts relating to a retirement plan. This will greatly help you make the right choice.

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