Lifestyle

Business owner or exec? Here’s the true value of financial planning

By May 7, 2020 No Comments

It’s no exaggeration to say that financial planning changes lives. It doesn’t just get you a better return for your money or ensure your family is protected should the worst happen (although it does both of these things!), but it also provides a range of benefits, both tangible and intangible.

So, to underline the many ways you can benefit from advice, here are both the financial and non-financial ways that financial planning adds value.

The non-financial benefits of financial advice

An objective opinion

If you look after your own investments, it’s easy for you to be swayed by the news or by articles you read in the press. Investment decisions can often be driven by emotion: by greed or fear, by worry or panic.

Having a financial planner as a trusted confidante helps you to remain objective and to stay on course. Your planner can execute trades based on analysis and information, providing advice where necessary and encouraging you to take the emotion out of decisions.

“When you’re looking for someone to tell you what to do with all your money, you have to have someone to trust. I wanted to have someone to trust, as a sounding board. I also wanted to know that if I happened to be the one who dies first in my family that I’ve got someone I can trust who’s going to go and hold the hand of my wife, and make sure she understands what’s going to go on next.”

Andrew Messenger, client

This objective opinion can be particularly important when the economy or markets are uncertain. Picking the right investment vehicle is important but timing your entry and exit is just as important.

Peace of mind

Forming a trusted long-term relationship with a financial planner means you can relax in the knowledge that a qualified professional is taking on many of your financial stresses.

You don’t need to check the markets, make trades or worry about your wealth. Your adviser can do all this for you, giving you the peace of mind and the freedom to concentrate on more important matters.

“The relationship has become like that of a trusted friend; someone who is working with us and positively encouraging us to achieve our goals and enjoy a life that is active but stress-free.”

John and Sarah Glasgow, clients

Skill, knowledge and experience

A qualified financial planner brings a wealth of knowledge and experience. This is even more true for a Chartered firm such as Henwood Court. For us to achieve this ‘gold standard’ in financial planning, we have to demonstrate:

  • High levels of technical knowledge through professional qualifications
  • A commitment to the ongoing development of our skills and knowledge
  • An adherence to strict ethical standards.

“It’s nice to have the ability to have investments, but there’s a lot of work and stress that goes into that. Most people don’t do it very well. We were useless, because we didn’t really know what we were doing. What’s great about Henwood is that they have a comprehensive approach. It makes sense. Leave investing to the experts; that’s what they’re good at.”

Malcolm and Cynthia Pollard, clients

The value of financial advice

Many of our clients cite their trust in us, our ability to listen, and our highly personal service as reasons they choose to work with Henwood Court. However, research has found that there are also tangible financial benefits of working with a qualified planner.

In 2019, the International Longevity Centre (ILC) published an updated version of its report The Value of Financial Advice. This ground-breaking study quantified the value of taking financial advice on people’s overall financial outcomes.

The key findings of the report are:

  • Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in terms of pensions and financial assets) of £47,706 in 2014/16
  • The benefits of financial advice for ‘affluent’ groups in terms of pension wealth was 11%
  • The benefit of financial advice for the accumulation of pension wealth is £30,991
  • In terms of financial assets, the benefit of financial advice is now £16,715 in 2014/16 with a greater impact for ‘affluent’ clients
  • Financial advice increases the probability of having savings by 4.1%

Why does taking advice mean you are likely to be better off?

One reason is that taking financial advice increases the probability of having risky assets (e.g. stocks and shares) by 7.5%. Non-advised clients are more likely to hold their savings in cash-based investments such as ISAs, where the returns are often lower (if less risky).

Fostering a long-term relationship also adds value

As part of their study, the ILC also looked at whether there were benefits to building and maintaining a relationship with a financial planner over time.

The evidence suggests that fostering an ongoing relationship with a financial planner leads to better financial outcomes. Those who reported receiving advice at both time points in the analysis (around eight to ten years apart) had nearly 50% higher average pension wealth than those only advised at the start.

“Henwood Court has helped me reach a position in life where I am financially comfortable. They have provided me with the confidence to leave them to manage my money, so I can get on and spend it and enjoy my life.”

Chris Rinaldi, client

Get in touch

If you’d like to find out how our approach to financial planning can help you, please get in touch. Email info@henwoodcourt.co.uk or call 0121 313 1370.

Please note:

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.