Financial planning is a tool that everyone can use to help ensure their family’s financial security in the short and long term. Working with an IFA is recommended.
Good financial planning is not solely for the rich, everyone can plan ahead to achieve their life goals now and in the future. Whether you’re planning to buy a house, get ready for retirement or support family members through their education, an independent financial adviser (IFA) will be able to work with you to make that an affordable reality.
Some of the biggest life events require a large amount of money, such as weddings, buying a house, a car, retirement and having a baby. We often know about these events in advance, and can then prepare financially for them. But there’s also the rainy day scenario, where you want to ensure you’re protected financially in the event of losing your job, having to pay for caregivers, or in the sad event of losing a loved one. To grow your assets and make the most of your financial savings you can choose investment and savings products that save you tax and provide returns based on your level of risk. All of this falls under the scope of an independent financial adviser.
When To Use An Independent Financial Adviser (IFA)
To Avoid, or Get Out of Debt
Historical and current debt can make it hard to get credit for large purchases such as a mortgage or car finance. Once you are in debt, it can be hard to get back into the black unless you plan your repayments wisely. An IFA can help you to assess all of your debts and incomes, if you should consolidate them, which should be paid back first, and how to live within your means in the future. This includes credit card bills, items you purchased on finance, payday lending and other debts.
Starting to Save
To secure your financial future you’ll want to build your assets, and that happens through savings and possibly investments. Saving for a rainy day, like a broken washing machine or car breakdown, means that you won’t have to go into debt to cover the expense. To then be able to afford financial luxuries like holidays, presents and the odd treat, you’ll need to save any surplus income after all of your necessary expenditures have been covered. Supporting a growing family also requires savings. That might be for a bigger deposit for a larger home, or to save up for a child’s education or wedding. An independent financial adviser can advise you of the best savings products to suit your needs.
To Buy a House
Before you buy a house, you’ll need to know how much money you have to spend, how much you’ll need to borrow, if the bank is willing to give you that amount, and how much you can afford to pay back, and over what duration.
Not only will an independent financial adviser help you to plan against these factors, but they can also access deals that might not be available to the public. Ploughing through the hundreds of products and rates on the market will also take the burden off you. Make sure you ask your IFA whether they’re paid commission by the vendor whose product they recommend, as this may affect which providers they present you with.
Planning for Retirement
It is becoming more likely that the State pension will not even cover basic living costs in the coming years, so saving for your old age to ensure that you have enough money to last through your retirement is essential.
Do you know how much you’ll need a month or a year to spend your retirement comfortably? Do you know the best ways to save money now to access that money in the future? Do you know which asset release program is right for you? An IFA will explain all of the different saving options, from ISAs to investments, as well as calculate how much you’ll need based on your current and projected circumstances. They may also discuss asset release plans such as lifetime mortgages, to enable you to protect your finances but live comfortably in your own home.
Protecting Your Family
In the event of unexpected death and tragedy, the last thing that you want to be concerned about are the financial ramifications. An IFA can help you to find the right insurance product whether you’re single, married, a homeowner, have children or you fit into any other category. This includes life insurance for yourself and family members. You’ll need to decide if you want to include cover for funeral costs, your children’s further education and to pay off the mortgage. For planning the inevitable, your IFA can also help you to save money when it comes to inheritance tax, and offer advice to make sure your family receives the most money possible from your estate.
Saving You Money
Looking at your tax positions can help you to save money. Your independent financial adviser will review your position and see if you can save money. It might include through government initiatives like ISAs. For complex financial situations, your IFA may advise you to move assets to your spouse or children to make the most of their personal allowances.
Growing Your Money
You probably think you know yourself pretty well in regards to risk. You’ll need to know how much risk you’re willing to take when it comes to investing your money to grow your assets. An independent financial adviser will assess your attitude to risk and compare the risk and reward of different investment options. They’ll protect you from putting all of your eggs in one basket and will spread the investments across product providers.
Watching Your Money
Once all of your investment products are in place, you’ll still need to monitor them to ensure that they are tracking correctly and to avoid poor performing products before you lose money. You can choose an IFA who will monitor your financial investments and products, and will then recommend moving assets if needed.
Disclaimer: TheMoneyDaily’s service is not intended to be, nor should it be construed as financial advice. We help our readers make informed decisions and can introduce you to comparison services and provide impartial information and guides. Where appropriate, we may introduce FCA authorised partners who can provide services relating to financial products.