Do I even need an adviser?
Good question – and not always an easy one to answer.
It’s obviously best to go into any major money decision with good advice. That’s just common sense. Even so, paying for an Independent Financial Adviser (IFA) to look at your situation may not always be worth it.
Don’t get us wrong – there are plenty of reasons to talk to a financial adviser. You might find yourself in an unusual or complicated financial position, for instance. Maybe you need help setting goals or understanding the risks of investing. On the other hand, if you’ve got relatively simple needs and plans, flushing a load of cash away on an adviser might not be a good foot to set out on in retirement.
Generally speaking, the less money you’re playing with, the less help you’ll probably need managing it. However, every decision you make will matter – so again, blowing a ton of cash on professional advice may not be the smartest move up-front.
So, how much money are we talking about here? Obviously, there’s a range of prices on offer for financial advice services, so a lot depends on where you’re looking and what you’re asking for. Also, it’s easy to get wrong-footed at the start with offers of free first consultations. By all means, take advantage of these, just to test the water. Keep in mind, though – you could well be looking at a sudden bill of up to £500 the next time you set an appointment.
Once you’ve picked an adviser (and a price) you’re comfortable with, you’re probably going to find yourself staring facing an hourly rate for your actual advice. Prices for this kind of help can feel pretty steep if you’re not prepared. We’re talking in the range of anywhere between £75 and £350 an hour here, with £150 per hour being a reasonable average to expect.
Things change if you’re looking for more of a “hands-on” style of financial help. For instance, you might need your adviser to take more of a long-term role in handling how your retirement money’s invested. At this point, the costs involved will largely depend on the size of the portfolio you’re playing with (basically, what’s in your investment “basket”). Typically, you’ll be charged a percentage of the total value of your investments. Again, there’s a range of prices for this kind of direct management, but you’re probably looking at somewhere between 0.5% and 5%.
The bottom line of all this is that the kind of advice you need with your retirement savings – and the price it’s worth paying for it – will depend on what your actual goals are. If you’re still thinking about that, we’ve put together two articles to help point you in the right direction: “Pension or ISA” and “SIPP or ISA”.