🤔 Financial Planner or No Financial Planner? 🤔

eskbanker

Albermarle said:

Many people are poor at :
Arithmetic, percentages etc 
Understanding of risk or probabilities
Handling money generally
Understanding tax issues.
Learning about boring and scary financial things.

And if everyone was up to speed on all these matters, this forum would be redundant!

allegro120

Manchester2024 said:

Hello All 👋 

I recently met with a financial planner after only ever saving in standard current/reward accounts in my life (I’m in my early 30’s. They offered a 3% fee on investments. 

I’m currently saving around £2000 per month and have savings of about £150,000 that I want to do more with. I do need to spend about £70k of that in the next 12 months. 

I’ve always been a bit risk-averse and scared of stocks and shares investments. Although I’m coming round to the suggestion that keeping my money ‘safe’ is also a risk after some research. 

I also don’t always have time/knowledge to constantly research the best options for my money, with having a young family. I know things depends on my financial goals, which at the moment is to simply help my money to do more with as little of what I deem to be ‘risk’ as possible. 

I would love to hear people’s thoughts on whether I should just go with a financial planner or try to do things myself?!

thanks 😊

My thoughts 

1. In a simple situation like yours paying somebody to deal with your money is an equivalent to calling electrician to change your light bulb.

2. If you are risk-averse, are you sure you want to invest instead of saving in FSCS protected accounts?  Is it worth putting your money at risk for the sake of a chance of getting a slightly better return?

3. You can easily spread your £150,000+£2000 per month across a couple of easy access bank accounts that pay 5% and above.  This doesn't consume much time and you will always have access to your money whenever you need it.  

MEM62

Manchester2024 said:

I recently met with a financial planner 

What is a financial planner?  If you want advice the only type of adviser you should be speaking to (and paying) is an IFA.  

Bazzalona13295

MEM62 said:

Manchester2024 said:

I recently met with a financial planner 

What is a financial planner?  If you want advice the only type of adviser you should be speaking to (and paying) is an IFA.  

The 'Independent' FA I knew used the same company for 90% of his dealings, not particularly independent then.
Put me off ever using one again unless I'm in a fix.

dunstonh

Bazzalona13295 said:

MEM62 said:

Manchester2024 said:

I recently met with a financial planner 

What is a financial planner?  If you want advice the only type of adviser you should be speaking to (and paying) is an IFA.  

The 'Independent' FA I knew used the same company for 90% of his dealings, not particularly independent then.
Put me off ever using one again unless I'm in a fix.

Most modern platforms are whole of market with over 30,000 odd investment options on them.     Platforms tend to offer most medium to larger size IFAs special terms which means it is very common for the majority of their business to steer towards one platform for a period.   

If whole of market is insufficient for you then I suggest the problem is you rather than the IFA.

Bazzalona13295

dunstonh said:

Bazzalona13295 said:

MEM62 said:

Manchester2024 said:

I recently met with a financial planner 

What is a financial planner?  If you want advice the only type of adviser you should be speaking to (and paying) is an IFA.  

The 'Independent' FA I knew used the same company for 90% of his dealings, not particularly independent then.
Put me off ever using one again unless I'm in a fix.

Most modern platforms are whole of market with over 30,000 odd investment options on them.     Platforms tend to offer most medium to larger size IFAs special terms which means it is very common for the majority of their business to steer towards one platform for a period.   

If whole of market is insufficient for you then I suggest the problem is you rather than the IFA.

Why thankyou. I suggest that you would be a right laugh on a night out......

Bearing in mind after years of consistently bad/biased (I could use other words) 'advice' this chap is now living in squalor without a pot to urinate in I'm quite happy to have been the problem.

More than happy in fact.

dunstonh

Why thankyou. I suggest that you would be a right laugh on a night out......

Your comments say more about you than me.    I feel sorry for you.

Albermarle

1. In a simple situation like yours paying somebody to deal with your money is an equivalent to calling electrician to change your light bulb.

A good analogy but to repeat my previous post in a slightly different way.

It can be difficult to change a lightbulb:

If you only have one leg ( or arm)

You are scared witless about anything electrical

You can not work out what bulb to buy due to the plethora of types, sizes etc 

You can't get the old bulb out, or work out how to get that complicated lightshade off first.

On this forum we tend to think that other people are like us, when in reality the level of public knowledge in the area of personal finance is frighteningly low. As soon as you mention risk 50% of the public would run a mile, and if you said ETF , probably 95% would just give you a blank look.

Linton

Manchester2024 said:

Hello All 👋 

I recently met with a financial planner after only ever saving in standard current/reward accounts in my life (I’m in my early 30’s. They offered a 3% fee on investments. 

I’m currently saving around £2000 per month and have savings of about £150,000 that I want to do more with. I do need to spend about £70k of that in the next 12 months. 

I’ve always been a bit risk-averse and scared of stocks and shares investments. Although I’m coming round to the suggestion that keeping my money ‘safe’ is also a risk after some research. 

I also don’t always have time/knowledge to constantly research the best options for my money, with having a young family. I know things depends on my financial goals, which at the moment is to simply help my money to do more with as little of what I deem to be ‘risk’ as possible. 

I would love to hear people’s thoughts on whether I should just go with a financial planner or try to do things myself?!

thanks 😊

From what you have said I do not think a paid-for advisor is appropriate for your problem at the moment.  The role of a Financial Advisor is to recommend how you best manage your money to meet your objectives.  Different objectives in terms of size of pot, when the money is required and appropriate tax management will require different best options.  There is no one option that is best for all situations.  

So for example.....

1) Are you wanting to be able to retire before State Pension Age with enough money to live comfortably?
2) Do you own a house or are you planning to buy one in the foreseeable futute?  If the latter, when?
3) Do you want to build up some wealth to be available at some specified point in the medium or long term?future?
4) Do you just want to build up wealth so you can access it all quickly at any time you way wish?  Really all of it?
etc etc

I suggest you think through what you really want to achieve - there are likely to be several things that are important to you.  Also educate your self by reading a couple of basic financial management books -  others can probably give you a better reading list than I can.

There are other things you could usefully do immediately...

1) Put aside say 6 months living expenses in an immediate access account so you can hande any immediate emergencies or problems like losing your job until you have had chance to sort out a longer term solution.

2) Are you a member of your employer's pension scheme?  Are you contributing sufficient to ensure you are getting the maximum contribution from them.  If not do so.

3) Perhaps put a portion of your savings into a Stocks& Shares ISA and buy a broad global fund just to get some hands-on experience.  You wont lose all your money and can expect to make a significant return over time.  However the path could be a bit rocky.The rest you could put into a high interest savngs account until you are clearer on how and when you are going to use your money.

allegro120

Albermarle said:

1. In a simple situation like yours paying somebody to deal with your money is an equivalent to calling electrician to change your light bulb.

A good analogy but to repeat my previous post in a slightly different way.

It can be difficult to change a lightbulb:

If you only have one leg ( or arm)

You are scared witless about anything electrical

You can not work out what bulb to buy due to the plethora of types, sizes etc 

You can't get the old bulb out, or work out how to get that complicated lightshade off first.

On this forum we tend to think that other people are like us, when in reality the level of public knowledge in the area of personal finance is frighteningly low. As soon as you mention risk 50% of the public would run a mile, and if you said ETF , probably 95% would just give you a blank look.

Yes, I know what you are saying and this probably applies to the vast majority of people. I know that for many even a simple thing like opening a new bank account looks like an enormous task and many people are frightened making financial decisions themselves. Don't have to go far, you've mentioned ETF and I'm giving you a blank look - I know it is some kind of investment, but have no idea what exactly this is and how it works