Why get financial advice? Managing your own finances and investments can be very rewarding, but experts argue there are life changing moments that could be the time to ask a professional to help steer you through.
You may be happy and confident to look after your own financial arrangements and investments so ask yourself, why get financial advice? But there are some key moments in life when doing so really makes sense, according to Michael Martin, Private Client Manager at fund managers 7IM.
Martin lists these key moments as:
- Getting married or entering a civil partnership
- Having children
- Inheriting money
- Retiring
- Dying
Getting married or entering a civil partnership
“You’ve tied the knot, enjoyed your honeymoon and settled down,” says Martin, “While it’s not very romantic, an important next step for couples is to consider their future finances.
“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? 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.”
Invest in your children’s future
“Children focus your mind firmly on the future,” he says, “An adviser can help you prepare for it, whether it’s covering education costs or taking that first step onto the housing ladder.
“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 look at your individual circumstances and advise what’s best for you.”
Receiving a windfall, inheriting money
Receiving a sum of money can transform your financial outlook, Martin says but adds that the pressure is then on to make the most of it and he accepts that deciding what to do can be daunting.
“In a low-rate climate, it can be tricky to choose between company shares, managed funds, investment trusts, bonds, property funds, or bricks and mortar. And what about all the options you haven’t even thought of?” he asks.
“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. These offer generous tax breaks to those prepared to take more risk. If you’re unsure about the risk you want to take, an adviser could also help determine this and help you build a suitable investment portfolio.”
