You probably meet with lots of clients every week and they may all come to you for different reasons. Yet, there’s a good chance that many of the individuals you see could benefit from professional financial advice.
Indeed, understanding how to take control of personal wealth and planning for the future is a key part of achieving both short- and long-term life goals, such as buying a home or funding a dream retirement.
Yet, you might find that some of your clients are reluctant to work with a financial planner. Research published by Canada Life has revealed that less than half of UK adults have taken professional financial advice and over a fifth say they wouldn’t even if it was free.
So, what’s behind this reticence? Unfortunately, there are several prevailing myths about financial planners that could be preventing your clients from seeking advice they could benefit from.
Read on to discover four of these myths and find out why financial advice can benefit anyone regardless of their stage of life or circumstances.
1. “I know how to manage my money, so I don’t need professional advice”
If your clients feel confident in their money management skills, they may feel that professional financial advice is an unnecessary expense.
However, this could be a false economy.
Imagine “saving money” by making a DIY home repair, only to face an eye-watering bill when a professional is needed to fix both the original problem and the repair attempt. Similarly, going it alone financially could result in costly mistakes and missed opportunities.
Unfortunately, your clients may not be as financially savvy as they believe themselves to be. According to research published by FT Adviser, nearly 24 million UK adults have poor financial literacy. What’s more, this lack of knowledge makes them £20,000 worse off on average compared to those with a higher level of financial literacy.
So, your clients might be mistaken in feeling they don’t need a financial planner. In fact, the investment your clients make in working with a professional could well be offset by the improvement in their financial situation over time.
2. “Financial planners are too expensive, and they charge hidden fees”
Financial planners charge a fee for their services, like any other qualified and regulated professional such as lawyers and accountants.
Yet, your clients may be surprised by how affordable professional financial advice can be. What’s more, working with a financial planner can deliver positive outcomes, as discussed above.
At Sovereign, we charge a fixed fee for financial advice based on the complexity of a client’s situation and the time required to provide the support they need.
We pride ourselves on offering a fair and transparent fee structure with no hidden costs and no conflicts of interest – our income isn’t dependent on selling a financial product.
So, provided your clients do their research and work with a regulated professional, they’re likely to receive a value-for-money service.
3. “Financial planners are only helpful to people who have already accumulated a lot of wealth”
The Canada Life research revealed that more than 1 in 5 UK adults have not taken financial advice because they believe they don’t have enough wealth to make it worthwhile.
This is a common misconception. A financial planner can provide valuable advice and guidance to help your clients build the wealth they need to achieve their short-, medium-, and long-term goals.
For example, a financial professional can use cashflow modelling to give your clients a clear picture of their future income needs. This could allow them to assess whether they’re on track to achieve their goals or if their current financial strategy needs adapting.
Equally, your clients could benefit from expert guidance in managing their assets tax-efficiently, diversifying their investment portfolio, and saving for retirement. All of these could help them to accumulate the wealth and lifestyle they desire.
4. “Trustworthy financial planners are hard to find”
A lack of trust is often one of the main deterrents to engaging with a particular service, and financial planning is no different.
The Canada Life study found that 1 in 10 adults in the UK do not trust financial planners.
Fortunately, it’s relatively easy to research potential firms and individuals online. So, with a little time and effort, your clients could find a reliable financial planner to work with.
It might be helpful to look for:
- Registration with the Financial Conduct Authority (FCA) – All financial planners in the UK must be registered with the FCA
- Chartered status – This is the “gold standard” of financial planning in the UK and demonstrates that a planner or firm works to high ethical standards
- Client reviews on websites – Such as Google Reviews and VouchedFor
- Recognised industry awards – Such as the Professional Adviser
Your clients may also wish to seek out personal referrals from friends, family members, or colleagues. Additionally, it’s worth checking that a financial planner can offer expertise in the particular area your clients need help with.
Talking to a professional and arranging an initial meeting is a good way to get a sense of whether they are a good fit.
So, if you have any questions about how we could work with your clients, or if you have a client who would benefit from Chartered advice, please get in touch.
Email hello@sovereign-ifa.co.uk or call 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate cashflow planning or tax planning.
Approved by Best Practice IFA Group Limited on 15/10/2024
