Do I Need A Financial Plan?

Here’s what you should consider

Are your finances where you’d like them to be? Do you feel more could be done to maximise your money? Well, you might want to consider talking to an Independent Financial Advisor (IFA), to help you with your financial plan.  Financial planning is the initial, and ongoing, exercise of establishing your personal financial aspirations, ambitions, risks and timescales. It can assess where you are against your goals, and what you can do to improve your chances of meeting those objectives. At Danbro, we adopt a personal approach to financial planning. We believe that one-to-one interaction with a trusted, well qualified financial planner can help make this process enjoyable and worthwhile.  What does a financial planner do, and do I need one?

A good Financial Planner / IFA will aim to get to know you, your personal circumstances, and what your long term concerns and ambitions are in relation to your finances. Once they’ve built up a picture of your objectives, they can analyse your existing financial position. This includes things like assets, liabilities, income and expenditure. This information is important to your advisor. It may reveal aspects of your financial management which could be improved in order to meet your end goals. From this, they can make recommendations that are particular to you. Your IFA can also draw up a cash flow plan, which is similar to a personal financial forecast. Using your own assets, liabilities, incomes and expenditure – and some reasonable assumptions about things like growth rates, inflation and tax – a forecast can be calculated.

This can be presented to you in a number of ways, depending on your preferences. Not all advisors are independent. Those who are will need to consider the whole market when it comes to recommending things like investments, pension plans, life/health protection, and mortgage products. All advisors must meet the minimum qualification criteria, and be authorised by the Financial Conduct Authority (FCA). 

So ask yourself:

• Where am I against my financial objectives?
• Do I need help with deciding what types of financial products are suitable for me?
• How can I invest in line with my objectives?
• Which products and providers should I choose?

With any of these questions, the help of a good financial planner, or IFA, could be extremely worthwhile.

How do financial advisors get paid?

Quite often, IFAs will initially offer up some of their time – at their own cost – to discuss your targets, explain their terms of service, and provide a quotation. The payment structure for an IFA then usually falls into one of three categories:

• Fixed fees
• Hourly rates
• Percentage based remuneration*

*This is where the IFA charges a percentage of the funds for which you are being advised.

If your plan involves the use of pure protection products, such as term life assurance or income protection, then your planner may also offer a “commission” option. This means they’ll be paid a commission by the insurer on the purchase of said products.