Rehobotics: Why hire a financial planner.

Hiring a financial adviser is much like delegating other tasks to specialists for example, joiner, plasterer, a gardener or housekeeper. In some of the cases you may be able to do the work yourself, the real benefit of working with a financial planner comes from

• • • Benefit of their professional’s knowledge.
    • The planner’s experience and know how.
    • The planner’s attention to detail.
    • The process to get you the best outcome.
    • Behavioural coaching when it comes your finances.
    • Reclaim precious time for higher-priority activities.

It is proven that those who work with a financial planner are also more knowledgeable investor, which is comparable to a personal coach helping an elite athlete fine-tune his or her skills and apply discipline in training. A recent ILC study shows over the longer term clients on average are £48,000 better off The value of financial advice: how much is it actually worth? (unbiased.co.uk)

7 technical benefits the expertise (professional knowledge) of a financial planner

1. Asset Allocation – Getting the right ‘mix’ of investments is the most important investment decision. How much should you invest in equities, bonds, cash and the like? Invest too cautiously and you won’t get the returns you need. Invest too aggressively and you’ll lose sleep at night. A financial planner will help you define your objectives for the investment. They will create a well thought out investment policy statement, identifying the right mix of investments for you. This ensures that you take the right level of risk and are best placed to achieve the returns you need.
2. Portfolio Rebalancing – To maintain the right mix of investments, you need to rebalance the portfolio every so often. This involves selling some of the investments and using the money to top up the others. Emotionally, this can be difficult to do, as we can become attached to certain investments. A financial planner will review the portfolio objectively and rebalance as required. This ensures that you maintain the right mix of investments and don’t take too much risk.
3. Cost Management – In most areas of life, you get what you pay for. If you pay more, you get more. But in the world of investing, you get what you don’t pay for. When you think about it, it makes sense. Costs matter because every pound you pay in costs eats into your future returns. A financial planner can reduce your charges by providing access to institutional investments with lower costs. This ensures you keep more of any investment return.
4. Investor Coaching – Investing can provoke strong emotions. When our investments fall by 20%, we panic. When our investments rise by 20%, we celebrate. The problem is, we’re all human. We’re hard-wired to avoid pain and seek pleasure. So, we sell our investments when they fall, and we buy them when they rise. A financial planner will act as a voice of reason between you and an expensive mistake. They will provide sound, objective advice, helping you stick to the plan and remain invested.
5. Tax Management – Taxes can be a major drag on your investment returns. Selecting the right ‘tax wrapper’ is just as important as selecting the right investment strategy. A financial planner will help you work out which accounts are right for you based on your tax position. They will consider the tax rate you pay now and consider the tax implications when you come to withdraw the money.
6. Withdrawal Strategy – How you withdraw money from your investments can have a big impact on your overall return. Which account should you withdraw from? Which investments should you sell? A financial planner will create a withdrawal strategy for your investments. This ensures that withdrawals are as tax-efficient as possible and that you maintain the right mix of investments.
7. Income Management – Your investments will produce income, such as dividends. Unless reinvested, this money will sit idle, producing no return. You may also need to withdraw some income from the portfolio. A financial planner will reinvest any income the portfolio provides. They will also determine which investments are sold when you need to withdraw money.

Do you need help with your finances. please speak to one of our financial planner?