Many people continue to go it alone with their financial planning, or else just take guidance from family and friends.
However, this is a strategy can lead to real problems in the future, and may up costing you more money than you save.
These are the key areas where you risk making expensive mistakes if you proceed without a financial adviser.
1) Switching pensions
As we move through different jobs, we will accumulate several different pensions and it can make sense to consolidate them into one pot to make them easier to keep track of. However, although this can be a good idea, it may leave you open to other issues. Examples of these could be exit penalties or losing valuable benefits.
2) Inheritance Tax planning and gifting
Wanting to financially support family members is understandable. This could involve lending money for a property deposit or helping a loved one through a difficult financial time. However, gifting money away can lead to difficulties. For instance, you could give a lump sum to a family member at a time when it feels affordable only to fall on financial difficulties later on. Similarly you might fall foul of Inheritance Tax gifting rules and leave your family with a substantial bill. An adviser can help you document your gifting history to ensure you stay within gifting limits and also make sure you are not leaving yourself short of money.
3) Wills
It is always a good idea to take legal advice before making a will to ensure your assets are distributed in a way that accords to your wishes on death. However, it is also important to take financial advice as there may be simple steps that can be taken to minimise Inheritance Tax.
4) Investments
Speaking to an adviser is important before making any investments. They can assess whether they meet your appetite for risk, are appropriately priced and sufficiently diverse. They can also help protect you against scammers.
5) Scam prevention
Many investment scams involve being contacted out of the blue by someone offering access to a high-performing investment. The victim is then pressured into transferring money quickly to the scammer who then disappears. Speaking to an adviser when you have been approached with an investment opportunity will help you understand if the opportunity is right for you. They can also help if you think you may have been scammed.
Independent financial advice
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Based on tax legislation at the time of publication. Please be aware that there will have been changes since this was published. Speak to your adviser for the most up to date information.
