Do I need an Independent Financial Adviser (IFA)?

Investment / Savings
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Almost everyone can benefit from having an IFA!
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Regardless of your stage of life, almost everyone could benefit from working with an IFA. Whether you’ve already got money, you’re trying to accumulate a nest egg or you’re simply saving for your retirement, an IFA can provide invaluable advice on the most appropriate savings, investments and pensions for your particular circumstances.

An IFA can also provide proactive tax advice to minimise Income Tax, Capital Gains Tax and Inheritance Tax.

For those wanting to protect themselves and their loved ones from disaster, an IFA can advise and arrange the most appropriate protection policies (life assurance, income protection and critical illness cover).

Can’t I just do it myself?

Unfortunately, a little like we all tend to think of ourselves as being great drivers, people tend to overestimate their ability in lots of other areas, including financial matters. In psychology, this is known as the Dunning–Kruger effect.

Now, if you’re putting up a shelf yourself, short of drilling through an electricity cable or water pipe, hopefully the worst that happens is you end up with a wonky shelf, or maybe some smashed ornaments.

But in financial matters the consequences of getting it wrong can be much worse, such as the case of Mr Joost Lobler. Simply due to ticking the ‘wrong box’ on a withdrawal form he incurred a tax bill of £350,000 on a profit of just £45,000.

Fortunately it doesn’t often go as catastrophically wrong as it did for Mr Lobler, but even on a smaller scale it’s easy to make costly mistakes.

But won’t I save money by doing it myself?

By obtaining a financial product direct from the product provider it is true that you avoid having to pay any advice charges.

However, as IFAs are able to source the entire marketplace, and often have access to better deals than are available direct to the general public, you can actually save money by using an IFA.

How much could I benefit by using an IFA?

It naturally depends on your own circumstances but for one recent client, who was retiring, the effect was staggering as I was able to increase his tax-free cash lump sum from his pension by £20,000 (net of fees) whilst still matching the existing provider’s annuity income.

Whilst an IFA won’t always be able to add that kind of immediate value, research by the International Longevity Centre-UK (ILC-UK) found that those that received independent financial advice were on average £40,000 better off than the DIYer. Now this gain was achieved over a few years but the value of professional advice is clear.

What if it all goes wrong?

Naturally, with Vouchedfor you are using the best IFAs as indicated by the genuine client reviews.

However, in the unlikely event you are misadvised and things go wrong, using an IFA offers you much greater protection than had you done things yourself.

Ultimately, there is the Financial Ombudsman Service and the Financial Services Compensation Scheme to protect you.

How do I find a good IFA?

Fortunately, Vouchedfor has made that part easy for you. Click here to search for a local IFA.

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