Choosing the right tax advisor can be critical when you’re making big decisions about your money. It’s not always easy to know who to trust, and which kinds of questions you should be asking. At their best, tax advisers can use their expertise to boost your finances and help you save effectively for your family’s future. At their worst, though, they can range from poorly qualified to outright scammers. A few smart questions at the start can save you a lot of problems later on.
So, what do tax advisers actually do? Well, for starters they can help you put away enough cash for a comfortable retirement – something that a lot of us have trouble budgeting for throughout our working lives. Depending on your personal situation, they can also show you how to invest properly, balancing the risks against the potential rewards while protecting your cash, or help when you’re house-hunting or taking out a mortgage. They can even help you maximise the benefits when you get a sudden cash windfall, like an inheritance or redundancy payment.
One thing that’s worth keeping in mind is that, when we’re talking about money, there’s a big difference between “advice” and “guidance”. When a charity or other organisation says it offers financial guidance, they mean they can talk you through the various options you can pick from. They won’t (or at least shouldn’t) get into the specifics of recommending any particular product, or steer you in any one direction. Financial advice, on the other hand, gets right into the gritty details. An adviser will explain which option they believe will suit you and your money the best.
Why does this difference matter? Simple – it’s a question of protection. Organisations offering guidance aren’t regulated by the Financial Conduct Authority (FCA). That means if things go wrong you probably won’t be able to go to the Financial Ombudsman for help. You probably won’t be able to claw back any lost money through the Financial Services Compensation Scheme, either.
What this all adds up to is that you have to pick your tax adviser with your eyes open. Make sure whoever you’re working with is covered by the FCA and you should at least have some protection if the wheels come off.