Pointless to seek a Financial Adviser? DH adamant we can ‘self serve’

[SunshineGem]

We’re both in our late 30’s, have a few different pension pots, as well as a keenness to start investing to potentially retire early.

I’ve suggested we seek an Financial
Adviser for some guidance but DH is adamant this is an unnecessary expense and with ChatGPT and the amount of information online e.g MSE website etc we can save the money and research ourselves. He also works in banking (not doing anything to do with this though).

Has anyone here has success stories with a FA in terms of the above, or would you save your money?

YABU - don’t seek an FA and self serve instead
YANBU - best to seek an FA

im very confused about all of this. When I wanted to transfer some pension pots I was told I couldn’t without independent financial advice
the pension provider would not do it directly with me
now I’m thinking this was not correct advice

MSE/ Martin Lewis doesn't do investment advice - just money saving.

The MSE forums on investments and pensions are very good, but it's a lot to wade through and the language/jargon quite technical and difficult to understand unless you already understand investments.

If you do decide on an advisor, you'll want an IFA, not a FA.

Were those defined benefit pensions?

I paid for a independent financial advisor when I got divorced and I had two pension pots plus a sum of money.

he told me to do what I’d been planning to do.

you can pay outright for their time which is what I did, or some work on commission.

honestly unless you have very unusual circumstances they are not going to recommend anything out of the ordinary and you can easily self serve.

Some financial institutions have deals on products that are only accessible to FA.

My pension type isn't accessible to the general public, its fees are reduced to 1% vs the 6% paid on the product to the public. This enables the FA fees to be incorporated into you charges.

If DH works in finance and doesn't know that...

I have only lost - not gained - money, by using an IFA. FWIW, here is my financial advice to you - and it's free.

Mortgage? Shop around for the best product for your needs, go to L&C mortgages; they charge you no fees and from my experience, give unparalleled advice.

Mortgage again? An IFA may try to persuade you to invest in the market which always has risk attached rather than reduce your outstanding mortgage.Consider making overpayments / lump sum payments if at all possible, instead.

Investments? Only invest in products you thoroughly understand. And investments that you are prepared to manage yourself. If you don't know how to do this, learn about it ... but only invest in stocks & shares etc with caution.

Investments? IFAs will be paid an upfront commission fee and charge you on-going fees for managing these on your behalf. To the extent financially they will never lose out on your investments, but your returns will be reduced once the fees etc are netted off.

Pensions? If you have a work-based scheme, consider joining that. If you have a defined benefits scheme, absolutely join that and pay in the max allowed.

Finally, read what you can - financial pages of reputable publications; MSE, reliable books - check your sources of information for credibility. Be very aware of any financial advice from FB and all social media.

1% is quite high for a pension.....

Hang on, you want your parents to be the financial advisors?? And you are wondering why your bf is saying “no thanks, I’ll do it myself?!”. Knock on with ya!

I’ve never used a FA, ever. All the information is out there and readily available (it has to be, by law). You just have to read it. People are intimidated by maths and numbers, but the only unknown is “what will happen in the future?” and nobody - least of all a FA who is a parent - can honestly answer that!

If he works in FS, they likely provide access to a IFA as part of his package

An IFA is a complete overkill (and waste of money) unless you're talking very, very large sums of money (I'd say 200k plus) or particularly complex finances.

Just use the Reddit UK personal finance flowchart https://ukpersonal.finance/flowchart/

This is an excellent starting point.

First off, ChatGPT should be avoided as should an FA/IFA.

I recommend reading the book Money Master the Game by Tony Robbins, which explains why the only thing you need to do is follow the advice that Warren Buffett has given his wife for when he’s gone: quite simply buy index trackers and don’t sell. As an investor you have to learn to yawn (or buy) through stock market crashes/dips).

On the topic of mortgages… mortgages are not the evil of the world, very wealthy people usually have them as they are the cheapest way to borrow money. Basically don’t overpay your mortgage if it’s costing you 4% if you can get a higher return (such as 6%) by investing. Of course when you get older feel free to de-risk by paying the mortgage off (which is what I did with a small part of my investment profit).

When building wealth, one needs to compare investment returns to interest paid.

For example when my son goes to uni I could pay outright for his fees or I could invest the money for him. I will compare the planned investment returns to his loan repayment costs (I will assume he gets a good job). I strongly suspect that if I go the investment route he will after 20 years have far more credit in his investment account than debit in his student loan account and so will be able to pay off the loan and have a good retirement nest egg waiting for him.

IME if you're someone who takes a moderate amount of interest in investing, you'll know more than most IFAs

Having gone to look its not 1% it's 0.1x% works out about £600 a year, but still less than if you went direct.

Also @ViciousCurrentBun has it right the first law of being rich is not getting divorced.

Clearly your experience is extraordinarily limited.

Agree with this.

We have an FA through our private bank and also consulted tax advisors. Essentially useless. (Caveat, one of us works in a financial sector) (caveat to the caveat: my uneducated past O level mother knew more tips and tricks than the tax advisors)

We had 7 figures invested and they didn’t provide us with some amazing insight. We just invested in commodities, maxed out ISAs, don’t pay off our mortgage (debt is cheap. We can make more by investing the money instead)

the tax advisors charged us best part of 10k for our tax returns. Am still pissed off about it. Waste of time and money.

What is a decent stocks and share ISA to go for?