Do I need a Financial Advisor?

FindingthePlot

I'm taking voluntary redundancy at the end of this month (so, tomorrow!).  I've found myself in what I feel is a very fortunate position - I'm in my early 40s, no children, no mortgage (paid off early a few years ago) and will have £60k total in the bank come tomorrow morning. Through my work I've been offered a free session with an IFA and this is booked for Wednesday morning.  The session is no strings attached but if I choose to take their investment advice, there will of course be a fee equal to a % of the amount I invest.

Until this point in my life, I've never had more than a few thousand in savings, so investments etc have always seemed like something for other people. I've been working to save more due to advance knowledge that I'd be taking redundancy - I keep £5k in a Halifax savings account for the purposes of their monthly draw and currently have £11k in a Marcus account.  I've signed up to MSE's Academy of Money course to try to build my financial knowledge. I'm reasonably intelligent and will have plenty of time on my hands to learn about money.

My plan is to take the rest of the financial year off, so I'll need to live off my capital for the next 9 months (my half of the bills comes to around £5k for the rest of the year, so this is the absolute minimum I know I'll need to use).

I'm looking for some opinions on whether you think investing via an IFA is likely to be a better option for me than going it alone? I'm not tight but I am frugal - so I'm happy to spend if it is likely to give me a financial advantage but don't want to end up paying for an investment package that I could've found for myself with a moderate amount of thought and effort.

Thanks

FindingthePlot

P.S. I'm not trying to bash IFAs here or anything like that - the situation I'm in is just completely different to anything I've experienced before, I don't even really know what IFAs do! 

dunstonh

Through my work I've been offered a free session with an IFA and this is booked for Wednesday morning. 

All IFAs have a free initial meeting.   They are not allowed to charge you until they state what their charges are and give you the opportunity to end without incurring charges.   However, no advice is given on the initial meeting.  Its just a meet and greet and concepts and ideas phase to see if there is good reason to use the IFA or not.

I'm looking for some opinions on whether you think investing via an IFA is likely to be a better option for me than going it alone? 

That is impossible to answer.   It is like any job people do in life.  Do you DIY or use a professional.  Some people can DIY at things very well.  Others will make a right pigs ear of it and some will do a passable job that is neither the best and neither the worst.

I'm not tight but I am frugal - so I'm happy to spend if it is likely to give me a financial advantage but don't want to end up paying for an investment package that I could've found for myself with a moderate amount of thought and effort.

If you are looking at around £50k or less, then its likely the IFA will use a more basic option.  However, some may not do.   Many IFAs wont offer their more advanced investment solutions to those under £100k (some much higher).

Alistair31

Unlikely an IFA would be that interested if you’ve only £60k to invest.

Albermarle

Firstly the same question has been asked many times before and there is no definitive answer.
It is quite possible to DIY with simple low cost  investments especially  if your own circumstances are simple as well.  You may, or may not save money .
Clearly the more time you spend understanding investments/risk/tax/pensions rules etc the better . This forum can be  a good source of knowledge .
An IFA will want to know about your personal circumstances , your goals ( early retirement , inheritance for the kids etc ) and your risk tolerance/profile. From this they will suggest a course of action /investment plan to achieve this as much as possible.
Probably you will be advised not to take too long off work using up capital !

DiggerUK

dunstonh said: ..........no advice is given on the initial meeting.  Its just a meet and greed and concepts and ideas phase to see if there is good reason to use the IFA or not..............

FindingthePlot "I'm not tight but I am frugal - so I'm happy to spend if it is likely to give me a financial advantage but don't want to end up paying for an investment package that I could've found for myself with a moderate amount of thought and effort."

dunstonh has highlighted my feelings about financial advisers. I would still advise you to meet them, nothing like seeing inside the belly of the beast at a face to face so to speak.

From your post I  detect that you will benefit from the "moderate amount of thought and effort" I feel you are capable of.
Best of fortune..._

2unlimited91

How confident are you that you'll get back into paid employment in 9 months' time? It's difficult to guess that, without knowing what line of work you're in — and whether you intend to do something different next. If you're less confident, you should probably keep rather more than what you'll spend in 9 months back as cash, which leaves less to invest. And still less, if you are thinking of retraining, rather than going straight back into work.

FindingthePlot

Alistair31 said:

Unlikely an IFA would be that interested if you’ve only £60k to invest.

Thanks all for your input.
Sorry, I had an initial 'meet and greet' type appointment a few months back, Wednesday is a more detailed meeting to discuss investment options.  I think the quote above sort of sums up why I'm hesitant - I'm hardly Lewis Hamilton here, so it feels a bit 'silly' to have a financial advisor helping me out. Really appreciate you all taking the time to share your views 

Swipe

I'd cancel and spend a few weeks doing your own research

barnstar2077

Personally I think I would wait till I had another job before I did anything drastic.  As swipe says, do a lot of reading up in the mean time.

Sea_Shell

Personally with no new job lined up yet and "only" £60k, i'd not be looking to INVEST any of it at the moment.   So i wouldn't be seeing an IFA at this point. 

However, i would be investigating topping up pension contributions, either by continuing to pay into a current one, or opening a personal one.   Due to the tax relief, the investments would have to do that much worse, before you are actually worse off.

Once you've got a new job and get settled in (say after 6 months or so) then I might consider other investments.

However, no new job is "safe" until you've worked there at least 2 years, so it's still a bold decision to either tie money up in fixed term accounts or invest it, IF it may still be needed within a short timeframe.

As others have said, research, research, research and you will be in a better position of understanding when the time comes.