Getting Financial Advice – You need a plan before you need a product

When it comes to making good financial decisions, the most important thing to do is to get under the skin of your needs, goals and objectives.

It might be a concern around a pension or an investment which prompts you to contact an adviser in the first place. There are some very complicated products out there, with successive governments making constant adjustments to suit their political and economic agendas. For pensions there have been hundreds of changes in the past decade alone, some minor, some major. But the starting point for any advice should not be a product.

An analysis of your income, expenditure, assets and liabilities will allow an adviser to create a financial strategy or plan for you – an assessment of what income you will need to generate to match your expenditure over the longer term. It’s an important part of the service an adviser provides for you. It helps you make much more informed decisions on how much you need to invest, what investment risks you need to take, and even when you might be able to retire.

In some cases you might not need a product, or the products you already have might be the right ones for the job. But where one or more is ultimately recommended by your adviser as part of implementing your strategy, it’s likely to be from one of three basic groups:

Insuring you against an event. Covering you and your family in the event of misfortune (for example, life cover, critical Illness cover and income protection cover)

Helping you save and invest for the future. Tax efficient vehicles (or ‘tax wrappers’) through which you can invest, often in underlying funds. They all have different tax advantages and disadvantages you should be aware of. The most common examples are pensions and ISAs.

Providing you with an income when you retire.

Stand-alone products or an investment platform?

Although the starting point for any advice should not be a product, in the end relatively simple needs can often be met by stand-alone products such as a pension, ISA or life insurance. But where more active management of an investment portfolio is needed, you might want to consider using an investment platform.

A platform lets you buy and sell investments across your whole portfolio, including your pension, ISA and any investments you hold outside of a tax wrapper. It makes trading easier, as the services are online. You can often make changes to your whole portfolio at the same time, and you’ll have an aggregated view of your investments and their value, typically updated on a daily basis.

Comparing different platforms, and their costs, can be complicated. At the least you’ll need to have an idea of which tax wrappers you want to invest through, how much you want to invest and – potentially – how often you think you’ll want to trade. Although all platforms should offer an investment range covering the most commonly used funds by investors, some have a narrower investment range than others (some only offer funds for example, while others might also let you invest in individual stocks and shares).

If you use an adviser all of this work is taken care of. Your financial plan would set out your high level requirements, followed by a recommendation of the products and investment funds needed to achieve that plan, including whether an investment platform would be suitable for you and, if yes, which one.

Important notice: This information is of a general nature and is not an offer or a solicitation to buy or sell any financial instrument or provide any financial services. No responsibility is taken for any losses, including, without limitation, any consequential loss, which may be incurred by acting upon advice or recommendations contained in this piece. The value of investments and income from them may go down as well as up and you may not get back the amount you originally invested. Tax is dependent on your personal circumstances and may change in the future.

WHIreland comprises WH Ireland Limited and WH Ireland (IOM) Limited which are wholly owned subsidiaries of WH Ireland Group plc. WHIreland Limited is authorised and regulated in the UK by the Financial Conduct Authority. WHIreland International and WHIreland International Wealth are registered business names used by WH Ireland (IOM) Limited which is licensed by the Isle of Man Financial Services Authority. WHIreland and the WHIreland logo are registered trademarks. FP1910-005

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