It’s pretty difficult to get by in life without having to make financial decisions about what you should do for right now in the moment, the medium term and for the long term. In fact, you just have to make decisions any way you look at it. So, as a financial adviser with over thirty years in the profession, how people access financial advice is of great interest to me and the implications of taking advice.

Only 3 types of ways to access financial advice

There are realistically only 2 ways to access financial advice. They all have their own advantages and disadvantages. So here is my quick summary of what you need to know.

  1. “D.I.Y.” advice – Yes, that’s “do it yourself” advice. There is absolutely nothing wrong with going down the DIY route, so long as you have the financial knowledge and the time to do the research required.

Advantage – In terms of what it will cost you, simply for what you do, it is most likely to be the cheapest.

Disadvantage – You don’t know what you don’t know, so it’s much easier to miss something or make a mistake

  1. “Do it with you” advice – This is where you take on the services of an adviser to complete a project for you or simply to implement a financial product. In the main you know what you want, but just need a professional to implement it for you.

Advantage – In the short term this will be less costly than ongoing advice and a good adviser should stop you at the point of implementation of doing something that is not in your best interest

Disadvantage – With no ongoing advice, it’s up to you make sure that what you are doing is still right for you and is still working. In a changing world things change and your plans may need to be adapted.

  1. “Done for you” advice – The Rolls Royce of advice if you like. The adviser works with you to craft a plan to meet your goals and objectives. Unlike “Done with you” advice the adviser is responsible for not only helping you create your plan, but is also responsible for making sure it stays on track. Oversight, communication and recommendations are key to this type of planning.

Advantage – You have a professional on your team, looking after your interests and making sure you don’t make mistakes with your plans. Very useful if you are short on knowledge and/or time or have complex financial needs.

Disadvantage – Clearly this is likely to be more costly than the others and finding the right adviser to work with is really important. Trust is everything.

So, which is best?

The simple answer is that “it depends”. For very simple financial decisions and assuming you have the knowledge, D.I.Y advice can be fine. This could be choosing a Cash ISA or opening a bank account.

For more complex decisions and particularly for those that don’t have the knowledge or the time to do the research, “Done for you” advice is the ideal choice. It goes without saying that having an expert guide you on any subject that is complicated should not be seen as a cost, but more an investment.

However, I see “Do it with you” advice as potentially the most dangerous. On the basis that most of us “don’t know what we don’t know” and as such it can be very easy to make mistakes in the future or just leaving your plans as they are, nit making changes when they need to be made. When it comes to anything complex, it takes a great deal of time to learn what you need to know to become an expert.

It’s a bit like learning to fly a plane. After a few lessons, you probably know which levers to pull and push and you know the theory of how to fly a plane. But would you want to start to take solo flights with your family to the other side of the country. I guess not.

Action call

Whatever you decide about taking financial advice, planning for a secure financial future can be complex as there are so many options and decisions to be made.

If you or your family would like to talk us about your financial plans for future, please get in touch for a no-obligation meeting. Go to our website www.miadvice.co.uk and contact us via our “Get in touch” form on our home page or Contact Martin Dodd on 01902 742221.

Email us at financialplanning@miadvice.co.uk

It is advisable to take advice from a professional financial adviser when making major financial decisions.

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The contents of this article should not be regarded as specific advice. No responsibility can be accepted by Martin Dodd or Midlands Investment Agency Ltd., for any loss that may occur by a person acting or refraining from acting on the basis of this article.

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